Breaking A Post Office FD Early? Here’s How It Affects Your Interest

Investing in fixed deposits (FDs) is a favorite choice for many Indians seeking safe returns. Among them, Post Office FDs are popular due to their reliability and decent interest rates. But what happens if you need to withdraw your FD before its maturity? Let’s break it down.

Rules for Breaking a Post Office FD

Post Office FDs come with a minimum lock-in period of six months. You cannot withdraw your money before this period.

• Withdrawal after six months but before one year: The interest rate drops to the savings account rate, which is 4%.
• Withdrawal after one year but before maturity: You get an interest rate 2% lower than the fixed rate.

So, breaking an FD early comes at the cost of reduced returns.

Special Rules for 5-Year Post Office FDs

5-year Post Office FDs have stricter rules: