Can I break FD in the lock-in period?

Yes, in most cases, you can break your Fixed Deposit (FD) even if it's within the lock-in period. However, it's crucial to understand the implications of doing so:

• Premature Withdrawal Option: Most financial institutions typically allow you to break an FD during the lock-in period, but this depends on the FD’s terms. Always review your FD agreement to confirm if early withdrawal is permitted.
• Penalty for Early Withdrawal: An early withdrawal from an FD usually results in financial penalties. FD breakage results in a penalty rate that is mentioned in the terms and conditions of the FD.
• Interest Earnings: When withdrawing during the lock-in period, interest is generally calculated only when the FD is active. Some FDs may not pay interest if broken too early.
• Restrictions on Certain FDs: Some FDs, like tax-saving FDs with a 5-year lock-in, may not allow withdrawals until maturity. Check the specific rules for your FD type.
• Alternatives to Breaking: Instead of breaking your FD, you can consider taking a loan against your FD. This helps you to access funds while keeping your FD active and continuing to earn interest.