What Happens If a Fixed Deposit (FD) Is Broken Before Maturity?

Breaking a fixed deposit (FD) before maturity usually leads to the following:

• Penalties: Most financial institutions impose a penalty for withdrawing funds before the FD reaches its maturity. The penalty varies by institution, FD type, and remaining maturity period.
• Reduced Interest Rate: The interest rate paid may be lower than the original rate, adjusted for the shorter term.
• Pre-Closure Charges: Some institutions may apply additional pre-closure or early withdrawal fees.

Review the FD agreement or consult with the institution for specific details on penalties and charges.