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What is a Callable and a Non-Callable Fixed Deposit?

What is a Callable and a Non-Callable Fixed Deposit?

What is a Callable and a Non-Callable Fixed Deposit?

A non-callable fixed deposit is a new version of a fixed deposit introduced by RBI (Reserve Bank of India) in 2015. A non-callable fixed deposit typically offers higher interest rates, and you cannot withdraw any money before maturity. A callable FD enables the investor to withdraw the whole/part of the deposit amount before maturity with minimum penalty charges.

A fixed deposit has always been one of the go-to options for investors of all ages as it offers security and stability. A Shriram Fixed Deposit offers one of the highest interest rates of up to 9.20%* p.a., including 0.50%* p.a. extra interest for senior citizens. You can also avail of an additional 0.25%* p.a. interest for renewals of all matured Shriram Fixed Deposits.

What is a Callable Fixed Deposit?

A type of fixed deposit that allows the investor to withdraw a total/partly invested amount prematurely is called a callable fixed deposit. Before the introduction of non-callable fixed deposits, all the fixed deposit plans in India were callable. Most banks and NBFCs charge a penalty for withdrawing the money before the deposit's maturity.

Features and Benefits of a Callable Fixed Deposit

  • The most advantageous factor of a callable FD is its ability to be withdrawn. Regardless of the penalty, it is a great feature, especially in times of financial emergency.
  • The interest rates of a callable FD generally can be low, but it offers excellent flexibility in terms of tenure and amount.
  • The minimum amount required to invest in this deposit is lower, making it easier for everyone to invest in such a scheme.

What is a Non-Callable Fixed Deposit?

A non-callable fixed deposit is a type of investment scheme that does not offer the facility of premature withdrawal. This fixed deposit's minimum amount is usually higher than a callable FD. The rate of interest on a non-callable FD is attractive as the amount remains blocked for the entire period till maturity.

Features and Benefits of a Non-Callable Fixed Deposit

  • A non-callable deposit is a rewarding investment scheme as you receive the maturity amount as a lump sum amount and hence, the interest yield is higher as compared to a callable fixed deposit.
  • A non-callable fixed deposit cannot be withdrawn unless the owner has faced bankruptcy or met a sudden demise.
  • The investment amount is blocked for a predetermined period of either one year or two years maximum.


The eligibility criteria for a callable and non-callable FD remain the same. You need to be above 18 years of age to avail of a callable or non-callable fixed deposit. Here is a list of documents required to apply for a callable or non-callable FD:

  • PAN (Personal Account Number) Card
  • Aadhaar Card
  • Voter's ID
  • Driver's licence
  • Utility bill (electricity, telephone or water bill)

Which is a Better Investment Option - Callable or a Non-Callable Fixed Deposit?

Choosing between a callable and a non-callable FD depends on your investment choice. If you need to invest a large sum of money over a short period to earn more interest, then a non-callable fixed deposit would be the best choice. It is best to keep in mind that you will not be able to withdraw any of the money in the deposit till the maturity of the deposit.

The word "callable" refers to the feature where the investor can withdraw the deposit before maturity. You may not yield higher returns and interest rates with a callable fixed deposit, but you will have the option to withdraw the amount as per your choice.

Shriram, the leading NBFC, offers a callable FD to all investors and provides an option to choose between a cumulative and non-cumulative fixed deposit plan. A Shriram FD will give you the option of a flexible tenure to plan your financial goals efficiently.

A callable FD is suitable for people who want to earn interest on their deposit but do not want to commit fully to the tenure of the deposit. A non-callable fixed deposit cannot be withdrawn once the investment has been made, and you will only get the interest with the principal amount upon maturity.

Key Highlights:

  • RBI introduced non-callable fixed deposits in the year 2015.
  • A non-callable FD does not allow an individual to close/break the deposit before maturity.
  • A callable FD is one through which you can prematurely withdraw your deposit money but may have to pay some penalty charge.
  • You can yield a higher interest rate with a non-callable fixed deposit.
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