What If a Fixed Deposit Is Broken

Breaking the fixed deposit means withdrawing the money from the account before maturity expires. If you require money urgently or there are any better investment opportunities then it become necessary to withdraw the funds from account. You have to pay some cost means you may get 1 percent lower interest rate than standard interest rate on the fixed deposit for breaking the fixed deposit.

Suppose if you invested in fixed deposit of three years with 9 percent interest and if you break this deposit then you may get only 8 percent of interest rate for three years.

There is an alternative to break the fixed deposit that is taking loan on fixed deposit. These loans are available with amount of ranging to 90 percent of the principal and aggregated interest.

Any better alternatives to Fixed Deposit:
There are low risk investment products, which offer better return than fixed deposits like stocks and mutual funds give higher returns with low risk. Financial experts believe that fixed maturity plans are better alternative to fixed deposits.

Fixed maturity plans have pre-determined period it may from few weeks to few years. In this your money is invested in government bonds and securities and money market instruments which give fixed income with low risk.

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