If you request an early withdrawal of a TD or Term FMD opened (or rolled-over an existing fixed term) on or after 1 August 2019, we will apply an early withdrawal fee. The amount of the fee will be equivalent to reducing the interest rate on your TD or Term FMD by 10-80%, depending on the elapsed term. The closer the early withdrawal date is to the maturity date, the lower the early withdrawal fee will be.
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% of elapsed term
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Reduction to Interest Rate
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0 to less than 20%
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80%
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20% to less than 40%
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60%
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40% to less than 60%
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40%
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60% to less than 80%
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20%
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80% to less than 100%
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10%
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Example: You have a $20,000 Term FMD invested for 1 year (365 days) at 2.50%p.a. and you request to withdraw it after 210 days. The interest that has accrued is: $20,000 x 2.50%p.a. x 210 / 365 = $287.67.
To determine the reduced interest rate to apply we divide the elapsed term of 210 days by the full term of 365 days to get an elapsed term percentage figure of 57.53%. In accordance with the above table, as the term elapsed is between 40-60%, we will apply a 40% reduction to the 2.50%p.a. calculated as follows: 2.50%p.a. – (2.50% x 40%) = 1.50%p.a.
Interest calculated using the new reduced interest rate is: $20,000 x 210 days x 1.50% / 365 = $172.60.
The interest adjustment is therefore: $287.67 - $172.60 = $115.07.
No early withdrawal interest adjustment will be applied if you withdraw funds within 7 days after reinvesting your term deposit (i.e. during the grace period).
