The Reserve Bank of India (RBI) has implemented new rules for fixed deposits (FDs) with Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) starting January 1. These changes simplify premature withdrawal terms and improve communication between depositors and financial institutions.
Withdrawals for small deposits
Under the new guidelines, depositors can withdraw the full amount of small deposits, defined as those up to ₹10,000, within three months of opening the deposit.
However, such withdrawals will not earn any interest.
Partial withdrawals for larger deposits
For deposits exceeding ₹10,000, partial withdrawals are now permitted within three months of opening the account. Depositors can withdraw up to 50% of the principal amount or ₹5 lakh, whichever is lower, without earning interest on the withdrawn portion.
The remaining balance will continue to earn interest at the originally agreed-upon rate.
Critical illness clause
A significant addition to the rules is the critical illness clause. If a depositor is diagnosed with a critical illness, they can withdraw the entire principal amount prematurely, regardless of the deposit term.
This withdrawal will also be interest-free but provides a vital safety net for those facing medical emergencies.
Maturity notification
The guidelines also improve transparency by requiring NBFCs and HFCs to notify depositors about upcoming maturities at least 14 days in advance.
Previously, institutions had to provide this notice two months before the maturity date.
Index Fund Corner
Sponsored| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | -- | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
Withdrawals for small deposits
Under the new guidelines, depositors can withdraw the full amount of small deposits, defined as those up to ₹10,000, within three months of opening the deposit.
However, such withdrawals will not earn any interest.
Partial withdrawals for larger deposits
For deposits exceeding ₹10,000, partial withdrawals are now permitted within three months of opening the account. Depositors can withdraw up to 50% of the principal amount or ₹5 lakh, whichever is lower, without earning interest on the withdrawn portion.
The remaining balance will continue to earn interest at the originally agreed-upon rate.
Critical illness clause
A significant addition to the rules is the critical illness clause. If a depositor is diagnosed with a critical illness, they can withdraw the entire principal amount prematurely, regardless of the deposit term.
This withdrawal will also be interest-free but provides a vital safety net for those facing medical emergencies.
Maturity notification
The guidelines also improve transparency by requiring NBFCs and HFCs to notify depositors about upcoming maturities at least 14 days in advance.
Previously, institutions had to provide this notice two months before the maturity date.
Live TV
Loading...
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!