FD Premature Withdrawal Calculator
Find out what you actually receive when you break an FD before maturity — interest at the reduced rate for the period held, minus the penalty — and what it costs you versus holding on.
FD Break Details
The bank’s card rate for the tenure you actually held
Amount on Premature Withdrawal
₹5,52,243
Interest: ₹52,243 at 5.00% · Cost of breaking: ₹22,198
Interest Earned
₹52,243
Effective Rate
5.00%
Applicable rate − penalty
If Held to Maturity
₹7,07,389
Cost of Breaking Early
₹22,198
Penalty + lower rate vs booked rate
How It Works
When you break a fixed deposit before its maturity date, banks do not pay the rate you originally booked. Instead they pay interest at the card rate applicable to the tenure you actually completed — which is usually lower — and then deduct a premature-withdrawal penalty, typically 0.5% to 1%. So a deposit booked at 7% for 5 years, broken after 2 years, might only earn the 2-year card rate (say 6%) minus a 1% penalty — an effective 5%. This calculator lets you enter the booked rate, the applicable rate for the period held, the penalty and the completed months, and computes the amount you would receive with quarterly compounding. It also shows what the deposit would have grown to at the booked rate, so you can see the real cost of breaking it early — helping you decide whether a loan against the FD might be cheaper than closing it.
Formula
Effective rate = Applicable card rate for period held − penalty. Amount = Principal × (1 + effective rate ÷ 400)^(4 × years completed) (quarterly compounding).
Frequently Asked Questions
How much interest do I lose by breaking an FD early?
You lose two ways: interest is recalculated at the (usually lower) card rate for the period you actually held the deposit, and a penalty of about 0.5–1% is deducted from that rate. The calculator shows the exact cost.
What is the premature withdrawal penalty?
A reduction in the interest rate, commonly 0.5% to 1%, that the bank applies when you close an FD before maturity. Some banks waive it for very short holdings or specific deposit types.
Is it better to break an FD or take a loan against it?
Often a loan against the FD is cheaper. Banks lend up to ~90% of the FD value at roughly 1–2% above the FD rate, letting you keep the deposit intact and avoid the penalty and lost interest.
Which interest rate applies if I withdraw early?
The bank’s published rate for the tenure you actually completed, not your booked rate. If you booked 5 years but withdraw at 2 years, the 2-year card rate applies — then the penalty is subtracted.
Is premature FD interest taxable?
Yes. Whatever interest you earn is taxable at your income-tax slab, and TDS may apply. Breaking early does not change the tax treatment of the interest actually paid.