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Can I Access My Fixed Deposit Funds Before Maturity?

Can I Access My Fixed Deposit Funds Before Maturity?

Can I Access My Fixed Deposit Funds Before Maturity?

Premature withdrawal of a Fixed Deposit (FD) may be unavoidable in certain situations, but it incurs a penalty charge. Fortunately, there are ways through which you can withdraw money from your fixed deposit account without even breaking it. You can earn a monthly income if you invest in a non-cumulative FD. Other ways to avoid the penalties are through FD laddering and sweep-in deposits, which give you the flexibility to access the funds without breaking the deposit.

Before opening a fixed deposit, you need to know the various types and features that will help you achieve your financial goals efficiently. Investing in an FD is a great way to develop a healthy habit of saving. With a Shriram Fixed Deposit, you can invest your money securely and get assured returns. You can also get higher interest rates than some of the other banks and Non-Banking Financial Companies (NBFCs).

Starting a new FD requires you to spend a lump sum of your money for some time. In some cases, especially emergencies, you may require the money you have set aside. So, how can you withdraw the money from a fixed deposit before maturity? Let's explore how to access the funds in your FD.

What is the Premature Withdrawal of a Fixed Deposit?

Premature withdrawal of an FD means breaking the deposit to access the funds before its pre-determined maturity date. The reasons why a person may choose to withdraw their money may differ. Some could be doing it for an emergency, while others may have found a better investment scheme and want to invest immediately. Prematurely breaking an FD will result in a penalty you will have to pay.

If you don't want to break the FD and incur any penalties, you can choose a non-cumulative FD. It features a regular payout of the interest accumulated on the fixed deposit so that you can use the earned money for your needs. Another option you have is a sweep-in FD. Through a sweep-in FD, you can withdraw funds from the fixed deposit whenever you need money without incurring any penalties.

How to Break an FD Before Maturity?

The process of breaking an FD before maturity is straightforward. It does not matter if you started your FD via online or offline mode. The basic process remains the same. The bank or NBFC will inform you of the early withdrawal penalty amount and disburse the rest in your registered savings account. The only difference is that you will have to visit the bank or NBFC branch in person and provide account details and identity proof of when you started your FD.

What are the Penalty Charges for Premature Withdrawal of an FD?

Most financial institutions charge a penalty for premature withdrawal of a fixed deposit. The penalty is usually 0.5% to 1.00% of the interest rate. Some banks and NBFCs have the facility of no liability in the case of an emergency or if you want to invest the same amount in another scheme offered by the financial institution.

If you want to close the fixed deposit prematurely, the interest rate will also be lower than the initially given rate. For example, a person has invested in an FD for three years at an interest rate of 8% per annum. The interest earned in the first year was 6% per annum. If the person wants to close the account and withdraw the funds, they will only be paid the interest of 6% per annum and not the 8% per annum for three years. This becomes a significant loss for investors wanting to close their FD prematurely.

How to Withdraw Interest Amount from your Fixed Deposit without breaking it?

Fortunately, multiple options let you access the funds in an FD without breaking it and facing heavy penalties. Here are some modes on how you can withdraw interest from your FD without breaking it:

  • FD Laddering

Fixed Deposit Laddering is the process where you apply for various fixed deposit schemes with different maturity periods. You require a lump sum amount that you can divide into smaller investments. This way, you have FDs that will mature when you need the money. You can reinvest it to continue the FD laddering to have flexibility if you need to withdraw an amount in times of need.

An example to explain this method: If you want to invest Rs. 10 lakhs, you need to break it up into multiple parts and invest with different maturity dates. The first can be an investment for just one year, the second for two years, the third for three years and so on. After one matures, you can reinvest it to continue the sequence.

  • Non-Cumulative FD

With a non-cumulative fixed deposit account, you can select a period to receive the interest payout. The interest payout can vary according to your choice, and you can get it monthly, quarterly, half-yearly or annually. This way, you can earn a regular income from the interest generated by your investment. You do not have to break an FD to access the funds; you get the interest and can use it as needed.

Since the interest is paid in advance, you will not get it as a lump sum when your deposit matures. You will get the principal amount and can choose if you want to reinvest or use it to achieve your goals. Shriram offers non-cumulative fixed deposits with up to 9.20%* p.a. interest rate. You can use the Shriram FD calculator to check the interest rates for the amount you want to deposit.

  • Sweep-in FD

With a sweep-in facility in a fixed deposit, you have the flexibility to manage your surplus cash. You can remove money from this deposit whenever you need it. It would be best if you had an FD with a minimum investment of Rs. 25,000 and a savings account in the same financial institution as the deposit to apply for this scheme. This scheme also ensures that the swept-in amount does not impact your cheques and other bills.

If you choose a sweep-in deposit, you will be given an option to set the amount that should be retained in your savings account, and the rest of your money will be swept in regularly. It is an excellent option for those who need to access their funds periodically, and this scheme will also help you earn a higher interest rate.


There are many ways in which you can invest in an FD. You can invest the smart way through the ways mentioned above and won't be forced to break an FD when needed. Opening a new fixed deposit is always a good idea as you can earn more interest on your money than keeping it in a regular savings account.

Invest now in a Shriram Fixed Deposit to get interest rates up to 9.20%* p.a., including additional interest of 0.50%* p.a. for senior citizens and 0.10%* p.a. for women depositors. With decades of trust in the market and over 2.12 million customers, Shriram provides secure FD accounts with assured interest. Now that you have all the information you need, you can begin your investment journey immediately.


1. Can we withdraw interest monthly on FD?

Yes, a non-cumulative fixed deposit gives you the option to earn a monthly income from the interest on your deposit.

2. How can I earn monthly interest?

You can earn monthly interest by opening a non-cumulative fixed deposit. Shriram offers cumulative and non-cumulative account options so you can choose the best one to grow your money.

3. How is FD monthly payout calculated?

The Shriram FD calculator can help you determine the total payout you can get from a deposit with a certain amount and investment period. The monthly payout can be achieved by dividing the entire interest earned on the fixed deposit.

Key Highlights:

  • Premature withdrawal of a fixed deposit can be harmful as penalties will be charged for such an action.
  • You can withdraw an FD without breaking it in multiple ways.
  • You can earn a monthly income if you invest in a non-cumulative FD.
  • FD laddering and sweep-in deposit can help you earn more interest on your fixed deposit amount while also giving you the flexibility to access the funds.
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