The penalty clause for premature closure of deposits on fresh deposits and renewals made is as follows:
Penalty of 1.00% on the "Applicable Rate of Interest" if the deposit is prematurely withdrawn or reinvested with the Bank for a period of 'less than one year'.
"Applicable Rate of Interest" is the interest rate applicable to the period for which the deposit remained with the bank or contracted rate of interest whichever is lower.
However, no penalty is levied if the entire proceeds of the prematurely closed deposit (with or without interest portion) is reinvested in term deposit schemes for a period of '1 year & above'. The proceeds of the deposits may be reinvested either in the same name or in different names.