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Are current FD rates higher? Is it wise to withdraw and reinvest your fixed deposit?

The Reserve Bank of India (RBI) has previously raised repo rates to control inflation, which has resulted in higher interest rates being offered on fixed deposits (FDs). Banks are currently providing interest rates on FDs ranging from 7-9%, benefiting senior citizens in particular. Some investors are contemplating premature withdrawal of their FDs to reinvest the funds for better returns. However, it's important to note that premature withdrawal incurs penalties typically ranging from 0.5% to 3% of the interest rate. Before considering premature withdrawal, the maturity date of the FD should be evaluated, as breaking the deposit may not be advisable if it is close to maturity. Additionally, when an FD is broken, the interest rate paid is lower than the original rate. Breaking an FD and reinvesting may be a prudent choice if the FD is relatively new or more than a year away from maturity, with a differential interest rate of at least 1% higher than the current offering. If