There are a multitude of options available in the financial market when it comes to finding investment options. But among all, one of the most stable and risk-free investment products is Fixed Deposits. If a person has to choose between two investment options: FD or Mutual Funds, then the majority of the population will choose FDs because of the three major qualities— high returns, zero risk, and bank guarantee.
The only thing that affects investors with negativity is money getting locked in. The capital that you invest is locked in until the FD tenure is over. But with the latest ruling from the Reserve Bank of India or RBI, now investors can break FDs, valuing up to ₹1 Cr, anytime.
RBI’s New FD Rules
Now, according to the Reserve Bank of India (RBI), banks have to allow early withdrawal on all Fixed Deposits (FDs) up to Rs 1 crore, up from the previous limit of Rs 15 lakh. This means that people can take out their money early from FDs of Rs 1 crore or less.
Now, banks can set different interest rates for Fixed Deposits (FDs) based on their duration and amount. Also, the option to withdraw prematurely is no longer available. These changes apply immediately to all commercial and cooperative banks. Additionally, the Regional Rural Banks or RRBs have seen an increase in the ‘bulk deposit’ limit from Rs 15 lakh to Rs 1 crore and more, as per the latest circular from the Reserve Bank of India or RBI.
Credit Information Companies (CIC) to Pay Compensation
Also, RBI mentioned that Credit Information Companies (CIC) will be fined Rs 100 per day for any delays in fixing customer credit information. Credit institutions (CI) and CIC have six months to put the new system in place.