The need for money may arise suddenly at any time. In such a situation, only your savings come in handy. But what if you don't have enough savings? In such a case, either the need is met by breaking the FD or the help of a loan is taken. But which of the two options is better? If you are going to break your FD (Loan On FD), then wait and understand the calculation first because breaking FD is right only in some cases and in some, it can cause huge losses.
Penalty will have to be paid
Suppose a person breaks his five-year FD prematurely. On which annual interest of 7 percent is being given. In such a situation, you will have to pay a penalty for prematurely breaking the FD. Many banks even charge fees for this. In such a situation, this option can be a loss for you.
Can you take a loan against FD also?
It is better to take a loan against your FD rather than break the FD. Many banks provide this facility. Which will cost you less than a personal loan. But on taking a loan, interest will have to be paid one or two percent more than the interest on FD. In this option, even though your debt burden will increase, there will also be huge savings in FD. Therefore this option can be considered better.
When is it right to break FD?
When only a few months have passed since the FD was made and you need a lot of money, then you can break the FD at that time. But if the money required is only twenty to thirty percent of the FD amount, then it would be better to take a loan. Decide to break the FD only when at least 70 percent of the FD amount is required.
