Can you withdraw money from RD?

Yes, it is generally possible to withdraw money from a Recurring Deposit (RD) account before its maturity, but this is subject to specific terms and conditions. It's important to distinguish this from closing the account prematurely.

Key Conditions for RD Withdrawal

Accessing funds from your RD account before its full term completes comes with specific rules designed to ensure the deposit's primary purpose is met while offering some flexibility.

• Minimum Account Age: To be eligible for a partial withdrawal, your RD account must have been operational for a minimum of one year. This typically means you need to have completed at least 12 monthly deposits into the account.
• Withdrawal Limit: The amount you can withdraw is capped at a maximum of 50% of the total deposits accumulated in your account up to that point. For instance, if you have deposited a total of ₹50,000 over 12 months, you can withdraw up to ₹25,000.
• Frequency of Withdrawal: Generally, only one such partial withdrawal is permitted throughout the entire tenure of the Recurring Deposit account before its maturity.

Understanding RD Withdrawal vs. Premature Closure

It's crucial to differentiate between a "partial withdrawal" and "premature closure" of an RD account. A partial withdrawal, as described above, allows you to take out a portion of your funds while the RD account continues to operate and mature. Premature closure, on the other hand, means you are terminating the entire RD account before its stipulated maturity date, which usually involves different penalty clauses and interest rate adjustments on the entire deposited amount. The rules outlined here pertain specifically to a partial withdrawal feature.

Practical Considerations

While the option to withdraw offers flexibility, it's wise to consider the implications:

• Impact on Savings Goal: Withdrawing funds reduces your total savings and the final maturity amount you would have received.
• Interest Earnings: The remaining amount in the RD account continues to earn interest as per the original terms, but your overall interest earnings will be less due to the reduced principal.
• Consult Your Bank/Post Office: While the general rules are similar across institutions, it is always advisable to check the specific terms and conditions with your bank or post office, as there might be minor variations in policy or specific procedural requirements.

Summary of RD Withdrawal Conditions

For quick reference, here's a summary of the typical conditions for withdrawing funds from an RD account:

For more comprehensive information on Recurring Deposits, you can refer to reliable financial resources such as Investopedia's explanation of Recurring Deposits.