Time-deposit early cancellation fee

Fixed-term deposits often allow the customer to cancel them and withdraw their money early in exchange for a fee set by the bank. The terms and conditions may stipulate a fixed penalty instead of a percentage early cancellation fee. The Banco de España requires that the penalty or fee charged for early cancellation of a traditional deposit may not exceed the gross interest accrued between the time when the deposit was first taken out and the cancellation date.

For other deposits, such as those paying a return linked to the performance of an index, to the value of a share portfolio, or contingent on the occurrence of a future event, banks are unlikely to accept early cancellation, and when they do, conditions may differ significantly from those applicable to ordinary deposits.

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