Yes Bank Hikes FD Premature Withdrawal Penalty

Yes Bank has stated on its website that it will impose a penalty charge for premature withdrawals for fixed deposits under 181 days. 
 
According to the bank's official website, the increased fees will take effect on May 16, 2022. Fixed deposits with terms of fewer than 181 days previously had no penalty costs, but now investors will have to pay a penalty of 0.25 percent for premature withdrawals. 
 
Premature withdrawal penalties will apply to all deposits booked/renewed for less than Rs 5 crore, as shown in the table below. 
 
 
According to Yes Bank website, these are key points to note:
 
  • Premature penalty will be applicable for all individual & non-individual customers.
  • Premature penalty will be applicable as per above regime for YES BANK staff who booked/renewed FDs for period 5th July 19 till 9th May 21. Nil premature penalty will be applicable for YES Bank staff FD booked/renewed on and after 10th May 21.
  • Premature penalty will be applicable as per above regime for Senior Citizen customers who booked/renewed FDs for period 5th July 19 till 15th May 22. No premature penalty will be applicable for Senior Citizen FD booked/renewed on and after 16th May 22.
  • Premature FD withdrawal penalty interest will be charged for partial as well as full withdrawal.
  • Penalty for premature withdrawal is not applicable on FCNR and RFC deposits.
  • For values >= Rs 5 crore, existing penalty structure shall continue at 0.25% for all tenure & value buckets.
 

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Changes in Our Business Model
 
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder