Penalty clause for pre-mature cancellation/part withdrawal of domestic Term Deposit.
A depositor is allowed withdrawal of Term Deposit before completion of the period of the deposit, agreed upon at the time of making deposit, subject to the penal interest rate with regard to premature withdrawal of term deposit. The penalty clause for premature cancellation/part withdrawal of domestic term deposits is as under:
- 1% penal interest shall be charged at the time of premature cancellation/part withdrawal of domestic term deposits for all tenors and interest rate payable would be contractual rate minus 1% or the rate under the scheme on the contractual date applicable for the tenor for which the deposit has actually run minus 1%, whichever is lower.
- No penalty is to be levied if the deposit is prematurely closed for the purpose of investment to any other term deposit scheme of the bank provided that the deposit remains with the bank after the re-investment for a period longer than the remaining period of the original contract.
- In case of term deposits with "Either or Survivor" or "Former or Survivor" mandate, premature withdrawal of term / fixed deposits can be allowed to the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder, if there is a joint mandate from the joint depositors to this effect. In such cases, the premature withdrawal will not attract any penal interest.