can we break rd before maturity?
Yes, you can close a Recurring Deposit (RD) before its maturity, but it comes with a penalty.
In RD, you deposit a fixed amount every month for a set period, and the bank promises you a certain interest rate. If you stop midway and withdraw the money, the bank will give you the amount you’ve deposited plus interest, but at a lower rate than promised and deduct a small penalty.
For example, if you open a 2-year RD at 7% interest but want to break it after 1 year, the bank may pay you only 5 to 6% based on their 1-year RD rate and deduct a small penalty. So, you’ll get your money back, but your returns will be less than planned.
It’s allowed, but it’s usually better to continue till maturity to get the full benefit.