Premature withdrawal of Fixed Deposit incurs any penalty/fee ?

[asiafrenz]

In the term & condition it says premature withdrawal of Fixed Deposit may incur a penalty/fee, in reality anyone has any experience with any bank that a penalty/fee was imposed for such premature withdrawal?

 

[TiedInsurer]

In the term & condition it says premature withdrawal of Fixed Deposit may incur a penalty/fee, in reality anyone has any experience with any bank that a penalty/fee was imposed for such premature withdrawal?

So far, no. Usually you just forfeit all the interest that you've accrued so far. That's it.

 

[Golem_Beatdown_Deck]

In the term & condition it says premature withdrawal of Fixed Deposit may incur a penalty/fee, in reality anyone has any experience with any bank that a penalty/fee was imposed for such premature withdrawal?

Depends on the bank

I know some banks will have a penelty charge.

Iirc, hong Leong finance will charge $50 for early withdrawal of fd

I maybe wrong. Best to check with your bank

 

[BBCWatcher]

There are also some fixed deposits that not only don't charge a penalty they also still pay accrued interest on pre-term withdrawals, at least to some degree. ICBC's "Step Up" fixed deposit is one such example. They offer a couple variants. One variant is a 12 month term (4 quarters) with premature withdrawals allowed at any time and accrued interest paid on whole quarters. The interest rate "steps up" each quarter, so the more whole quarters you keep the funds on deposit, the higher the annualized yield. But you always get at least some interest for a fully completed quarter. This sort of construction is somewhat similar to Singapore Savings Bonds, except the term is shorter (one or two years instead of 10), the interest accrual is quarterly instead of monthly, the withdrawals are immediate instead of on monthly cycles, and of course SSBs are safer especially above the SDIC limit.

 

[maple96]

In the term & condition it says premature withdrawal of Fixed Deposit may incur a penalty/fee, in reality anyone has any experience with any bank that a penalty/fee was imposed for such premature withdrawal?

Which bank is your FD with? read the tnc and check with the bank.

The penalty/fee usually refers to forfeiture of interest, or payment of interest at board rate depending on how long u have held the FD.

For eg. (my experience was more than 10 years ago), I will check with the bank if they will pay interest every 3 mths, if so, I will terminate only when the 3mths or multiples of it, so at least I get back some interest at board rate. If less than 3mths, interest is zero.

Below is DBS FAQ as eg:

How is the interest calculated if I withdraw my fixed deposit before it matures?

We adopt the industry's guideline of paying interest based on the completed quarters of a calendar year. That is, interest is not paid if the completed period of deposit is shorter than 3 months. However, do note that if the completed period of deposit is 3 months or more, you may still earn less or no interest. More importantly, we will return the full principal amount. Please check with our branch staff for more details and consider carefully before performing a premature withdrawal.

 

[Food_Lover]

Depends.

Most of the fixed deposits will not give you any interest in the event of pre-mature withdrawal.

 

[asiafrenz]

Thank you all for your answers.

I was reading the Terms for Maybank Time-deposit, it reads:

5. Withdrawal of Time Deposit

(b) In the event that you make a premature withdrawal of deposit, any interest payable for such premature withdrawal (whether in full or in part) shall be determined and computed at our sole discretion as we may notify you. No interest shall be payable for premature withdrawals made within 3 months from the date of deposit. We may further at our discretion levy an early withdrawal fee at such rate as we may notify you in the event of any premature withdrawal.

 

[maple96]

Thank you all for your answers.

I was reading the Terms for Maybank Time-deposit, it reads:

5. Withdrawal of Time Deposit

(b) In the event that you make a premature withdrawal of deposit, any interest payable for such premature withdrawal (whether in full or in part) shall be determined and computed at our sole discretion as we may notify you. No interest shall be payable for premature withdrawals made within 3 months from the date of deposit. We may further at our discretion levy an early withdrawal fee at such rate as we may notify you in the event of any premature withdrawal.

ok I forgot to add: If u place a FD where there is a promo with free gifts, the bank will make u sign a form to agree to pay a "fee" equal to the value of the free gifts in the event of premature withdrawal.

That is usually the meaning of the clause u highlighted in red. U might want to confirm with Maybank when u place the FD.

(I used to play with FD many years ago, with free gifts, whenever the rate go up and worth early termination , I will terminate and place new FD.)

 

[asiafrenz]

ok I forgot to add: If u place a FD where there is a promo with free gifts, the bank will make u sign a form to agree to pay a "fee" equal to the value of the free gifts in the event of premature withdrawal.

That is usually the meaning of the clause u highlighted in red. U might want to confirm with Maybank when u place the FD.

(I used to play with FD many years ago, with free gifts, whenever the rate go up and worth early termination , I will terminate and place new FD.)

I see, thank you, but in this case, its just their standard terms for Time Deposit i think, there is no free gift whatsoever.