Sannihitha Ponaka

Introduction

SBI provides a diverse range of fixed deposits with varying interest rates for different tenures. Minimum tenure for SBI Bank fixed deposits is seven days. The maximum tenure is ten years. The minimum deposit is INR 1,000. There is no cap on maximum investment. The bank levies 0.5%-1% as a penalty for premature withdrawal. There is also a loan facility against the FD. Investors can get up to 90% of the deposit amount as a loan.

SBI FD Interest Rates 2020

SBI FD interest rates are given below.

State Bank Fixed Deposit Interest Rate

Note: SBI revises FD interest rates periodically 

SBI Bank fixed deposits have a minimum interest rate of 2.9% and a maximum of 5.4%. All fixed deposit schemes for senior citizens in SBI have a higher interest rate than regular citizens. The interest for SBI fixed deposit scheme is calculated every quarter. However, the investors can choose the interest payment intervals. It can be regular interest payments or at the time of maturity.

Any investment made in Tax Savings FD of SBI qualifies for tax saving under section 80C of the Income Tax Act. However, any investment made in other SBI FDs does not qualify for tax savings.

TDS of 10% is deducted on interest paid or payable by the banks or financial institutions. From the AY 20-21, the limit for TDS has been increased from INR 10000 to INR 40000 interest income. Hence, the TDS is applicable on interest income above INR 40,000 per annum (INR 50,000 for senior citizens) from AY 20-21. 

Furthermore, in the case where the investor doesn’t provide PAN details, the TDS would be 20%. Also, the interest income is taxable at the applicable income tax slabs. No surcharge, education cess or SHEC is added to the above rates. The TDS is deducted at the basic rate.

Key Features of SBI Fixed Deposit

Following are the key features of SBI Fixed Deposits:

• SBI fixed deposit scheme offers guaranteed income at a fixed interest rate.
• Tenure: The tenure ranges between 7 days to 10 years
• Minimum Deposit Amount: The minimum amount to open an FD with SBI Bank is INR 1,000.
• Maximum Amount: No upper limit on the deposit amount.
• SBI bank allows depositors to deposit bulk amounts, i.e. deposit above INR 2 crore.
• Interest Rate: SBI FD offers interest rates in the range of 2.50% p.a to 5.50% p.a.
• Senior Citizens FD Rate: SBI offers a higher interest rate for senior citizens. An extra 0.5% is offered to individuals above 60 years.
• For deposits held beyond five years, SBI offers 0.3% additional interest rate.
• Depositors can choose interest payout frequency (monthly or quarterly)
• Safety: SBI Bank provides insurance cover for deposits up to INR 5,00,000 to all its investors.
• Loan against FD: Depositors can avail loan on the SBI Bank FDs. This is to help the depositors to meet their financial requirements without having to break the FD.
• Nomination Facility: SBI Bank allows depositors to nominate beneficiaries for the deposits.
• Auto-Renewal: The bank provides the auto-renewal facility of the FD account.
• Convenience: Depositors can open FD investment anywhere at any time at their convenience. FD can be opened through Internet Banking or by visiting the nearest bank branch.

Types of Fixed Deposits FD offered by SBI

• Regular FD
• Flexi Deposit Scheme
• Reinvestment Plan
• Annuity Deposit
• MOD
• Tax Savings

Types of Fixed Deposits: In Detail

SBI Regular FD

• Guaranteed Returns: SBI Regular Fixed Deposit Account allows depositors to park lump sum amounts and get guaranteed returns.
• Tenure: The tenure ranges between 7 days to 10 years
• Minimum Deposit Amount: INR 1,000
• Maximum Deposit Amount: No Limit
• Interest Payment: Depositors can choose between monthly or quarterly or calendar quarters based on their requirements. Also, monthly interest payments are at discounted rates.
• Loan: Depositors can avail a loan or overdraft up to 90% of their deposit amount.
• Nomination Facility: Available
• Premature Withdrawals: SBI FD allows premature withdrawals, however with a penalty.
• TDS: SBI deducts TDS at applicable rates in case Form 15G/15H is not submitted.
• Flexibility: SBI FD offers flexibility to depositors to convert from regular interest payout to cumulative interest payout and vice versa.
• Renewals: SBI FD provides auto-renewals in case there isn’t any instruction given while opening the account.

SBI Flexi Deposit

• SBI Flexi deposit scheme is a variant of recurring deposit. However, this scheme allows variable deposit amounts instead of fixed instalments.
• Minimum Deposit Period: 5 years
• Maximum Deposit Period: 7 years
• Minimum Deposit Amount: INR 5,000 in a financial year. Minimum of INR 500 at one instance. Also, deposits can be made any number of times in a month.
• Maximum Deposit Amount: INR 50,000 in a financial year.
• Penalty for payment default: INR 50 in a financial year.
• Interest: Rate of interest is the same as a regular fixed deposit.
• Interest Payment: Interest for SBI staff and SBI pensioners is 1% higher than the applicable rate. Similarly, the rate for senior citizens is 0.5% higher than the applicable interest rate.
• Loan: Depositors can avail loan to 90% of their deposit amount. 
• Nomination Facility: Available
• Transferable: The account can be transferred from one SBI branch to the other easily.
• Mode of Holding: Single or joint account
• Eligibility: Resident individuals, including minors, can open the SBI Flexi Deposit Scheme.

SBI Reinvestment Plan

SBI Reinvestment Plan one of the fixed deposits FD plan where the interest is added to the principal amount. Here the interest is paid upon maturity. The deposits earn compound interest.

• Minimum Deposit Period: 6 Months
• Maximum Deposit Period: 10 years
• Minimum Deposit Amount: INR 1,000 and in multiples of INR 100 after that.
• Maximum Deposit Amount: No limit
• Interest: Rate of interest is the same as a regular fixed deposit; however, the interest gets compounded quarterly.
• Interest Payment: Interest is paid upon maturity. However, interest for SBI staff and SBI pensioners is 1% higher than the applicable rate. Similarly, for senior citizens, the rate is 0.5% higher than the applicable interest rate.
• Loan: Depositors can avail loan to 90% of their deposit amount. 
• Nomination Facility: Available
• TDS: SBI deducts TDS at applicable rates if Form 15G/15H is not submitted.
• Transferable: The account can be transferred from one SBI branch to the other easily.
• Mode of Holding: Single or joint account
• Eligibility: Resident Indians (single or joint), Minor, Company, Firm, Local Bodies, any government department and HUFs can open SBI Reinvestment Plan.
• Flexibility: SBI FD offers flexibility to depositors to convert from regular interest payout to cumulative interest payout and vice versa.

SBI Annuity Deposit Scheme

• SBI Annuity Deposit Scheme enables depositors to deposit a lump sum amount to receive equated monthly instalments. The EMIs comprise a part of the principal amount as well as interest on the reducing principal amount. The interest is compounded quarterly. However, the amount is discounted to the monthly value.
• Minimum Deposit Duration: 36/60/84 or 120 months.
• Minimum Deposit Amount: INR 1,000 and in multiples of INR 100 after that.
• Maximum Deposit Amount: No limit
• Interest: Rate of interest is the same as a regular fixed deposit; however, the interest gets compounded quarterly. Also, for SBI staff and SBI pensioners interest is 1% higher than the applicable rate. Similarly, for senior citizens, the rate is 0.5% higher than the applicable interest rate.
• Annuity Payment: On the anniversary date of the month following the month of deposit. However, in case the date is non-existent, i.e. 29th or 30th or 31st, the payment would then be on the 1st of next month.
• Premature Withdrawals: Available, however with a penalty.
• Loan/Overdraft: Depositors can avail a loan or overdraft up to 75% of the balance amount.
• Nomination Facility: Available
• Transferable: The account can be transferred from one SBI branch to the other easily.
• Mode of Holding: Single or joint account
• Eligibility: Resident individuals, including minors, can open the SBI Annuity Deposit Scheme.

SBI Multi Option Deposit Scheme

• SBI Multi Option Deposit Scheme (MODS) allows linking fixed deposit account to current account or savings account. Unlike regular fixed deposits, MODS allows depositors to withdraw money in multiples of INR 1,000. The remaining amount will continue to earn interest.
• Minimum Deposit Period: 1 year
• Maximum Deposit Period: 5 years
• Minimum Deposit Amount: INR 10,000 and in multiples of INR 1,000 thereafter.
• Maximum Deposit Amount: No limit
• Interest: Rate of interest is the same as a regular fixed deposit.
• Loan: Depositors can avail loan on their deposit amount. However, future withdrawals are not permitted in case of a loan against the account is taken.
• Nomination Facility: Available
• TDS: SBI deducts TDS at applicable rates.
• Transferable: The account can be transferred from one SBI branch to the other easily.
• Premature Closure: Available, however with a penalty.
• Auto Sweep: Available. However, the auto sweep of INR 10,000 takes place only when the minimum balance amount in a savings account or current account is INR 35,000.
• Eligibility: Resident Indians (single or joint), Minor, Company, Firm, Local Bodies, any government department and HUFs can open SBI multi option deposit scheme.

SBI Tax Savings Scheme, 2006

• Minimum Deposit Period: 5 years
• Maximum Deposit Period: 10 years
• Minimum Deposit Amount: INR 1,000 and in multiples of INR 100 thereafter.
• Maximum Deposit Amount: INR 1,50,000 per year
• Interest Payment: The interest payment terms are similar to that of regular fixed deposit. However, interest for SBI staff and SBI pensioners is 1% higher than the applicable rate. Similarly, for senior citizens, the rate is 0.5% higher than the applicable interest rate.
• Loan: No loan facility available during the lock-in period of 5 years.
• Nomination Facility: Available
• Taxation: Deposits up to INR 1,50,000 in a year qualify for Income Tax deduction under Section 80 C of the Income Tax Act. However, SBI deducts TDS at applicable rates. Also, the depositor has to submit Form 15G/H to get an exemption.
• Transferable: The account can be transferred from one SBI branch to the other easily.
• Joint Account: A joint account can be opened by two adults or by an adult and a minor.
• Eligibility: Resident Indians and HUFs have a PAN Card and can open SBI Tax Savings Scheme.

FD account opening process

SBI FD can be opened online and offline. One can invest in SBI Bank FD offline by visiting the nearest branch of SBI. The investors have to submit the FD application form with details like the type of FD, interest payout frequency, and tenure. Along with the application form, one also has to submit all the necessary documents.

Account opening online  is the same as offline, but instead of visiting the branch, one has to go to the SBI’s website.

Following are the documents required to open an FD in SBI are:

• FD account opening form
• 4 passport size photographs
• Identity Proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
• Address proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
• Age Proof (Birth Certificate, Matriculation Certificate)
• Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
• Bank Account details like account number, IFSC code and branch
• Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

Also, only eligible investors can invest in SBI Bank FD. The eligibility criteria to invest in SBI Bank FD is:

• Resident Individuals
• Partnership Firms
• Public and Private Limited companies
• Societies
• Trusts
• HUFs
• NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)

Loan against FD account

SBI provides a loan against FD. Investors can get 90% of the deposit amount as a loan. The FD will be used as collateral. And on the occasion of non-repayment of the loan, the bank uses the FD to recover the loan amount. The bank charges a 1% interest rate above the FD interest rate for the loan. The loan repayment period is 3-5 years.

Loans such as loan against property (home loan), business loan, an education loan, etc., can be taken against an FD. The loan interest rate varies based on the bank and type of loan. One can always calculate their loan EMI using Scripbox’s online loan EMI calculator. The loan EMI calculator works as a home loan calculator. It also works as a personal loan EMI calculator and car loan calculator. The investor can also use this EMI calculator in multiple scenarios. They can do so changing the car loan interest rate, personal loan interest rate, and home loan interest rate.

Premature withdrawal

SBI allows premature withdrawal on its FDs. However, it charges a penalty for the same. For deposits up to INR 5 lakh, for all tenures, the penalty is 0.5%. The deposits above INR 5 lakh but below INR 1 Cr have a penalty of 1%. For all deposits withdrawn with seven days of deposit, there is no penalty.

What is the tenure range for SBI Fixed Deposit?

The tenure range for SBI fixed deposit is seven days to 10 years. The tenure breakdown is:

Does SBI Bank offer Recurring Deposits?

Yes, SBI offers recurring deposits for its depositors. The recurring deposits have a minimum tenure of one year. The maximum tenure of the recurring deposit is ten years. Depositors can open an RD account either by going to the bank branch or online using net banking. Below are the SBI RD interest rates for different tenures.

Note: SBI revises RD interest rates periodically

Can I open an FD account without holding a bank account with SBI?

Yes, one can open an FD in SBI without having a saving or current account in SBI. The individual has to submit the following documents for the same.

• FD account opening form
• 4 passport size photographs
• Identity Proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
• Address proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
• Age Proof (Birth Certificate, Matriculation Certificate)
• Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
• Bank Account details
• Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

Who is eligible for opening an FD account in SBI?

Only eligible investors can invest in SBI FD. The eligibility criteria to invest in SBI FD is:

• Resident Individuals
• Partnership Firms
• Public and Private Limited companies
• Societies
• Trusts
• HUFs
• NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)

Is PAN mandatory to open an SBI FD account?

A PAN card isn’t mandatory to open an SBI FD account. However, there are a few implications for the same.

• Under section 206AA, TDS will be deducted at the rate of 20% instead of TDS at a rate of  10% u/s 194A
• The bank will not issue any TDS certificate.
• The income tax department will not credit TDS
• Form 15G/H and other exemption certificates will be invalid and penal TDS will apply.

What is the current interest rate on a fixed deposit account in SBI?

The SBI FD interest rates are higher than the rates on savings accounts. The interest calculation for SBI fixed deposit scheme is done every quarter. However, investors can choose the interest payment intervals. It can be regular interest payments or at the time of maturity. Also, the interest income is taxable at the rate of an individual’s income tax slabs.

The current fixed deposit rates of SBI are:

For regular citizens the SBI FD interest rates are:

• For a tenure of 7-45 days, it is 2.9%
• 46-179 days the FD rate is 3.9%
• The FD rate for 180-364 days is 4.4%
• For 1 year to 2 years 364 days, it is 5.1%
• 3 years to 4 years 364 days 5.3%
• Any FD with a tenure of 5-10 years is 5.4%

All fixed deposit schemes for senior citizens in SBI have a higher interest rate than regular citizens. The SBI FD interest rates are:

• For a tenure of 7-45 days, it is 3.4%
• For 46-179 days it is 4.4%
• The FD rate for 180-364 days is 4.9%
• For 1 year to 2 years 364 days, it is 5.6%
• 3 years to 4 years 364 days 5.8%
• Any FD with a tenure of 5-10 years is 6.2%

To calculate the maturity amount of an FD investment, one can use a fixed deposit calculator. Scripbox’s fixed deposit calculator is available online and is free to use.

What are the documents required to open a Fixed Deposit account in SBI Bank?

The documents required to open an FD in SBI are:

• FD account opening form
• 4 passport size photographs
• Identity Proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
• Address proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
• Age Proof (Birth Certificate, Matriculation Certificate)
• Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
• Bank Account details like account number, IFSC code and branch 
• Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

Can I take a loan against a fixed deposit?

SBI provides a loan against FD. Investors can get 90% of the deposit amount as loan. The FD will be used as collateral. And on the occasion of non-repayment of the loan, the bank uses the FD to recover the loan amount. The bank charges a 1% interest rate above the FD interest rate for the loan. The loan repayment period is 3-5 years.

Loans such as loan against property (home loan), business loan, an education loan, etc., can be taken against an FD. The loan interest rate varies based on the bank and type of loan. One can always calculate their loan EMI using the loan EMI calculator. The loan EMI calculator works as a home loan calculator. It also works as a personal loan EMI calculator and car loan calculator. The investor can also use this EMI calculator in multiple scenarios. They can do so changing the car loan interest rate, personal loan interest rate, and home loan interest rate.

What are the tax implications of fixed deposits?

5-year tax saving FDs and FCNR FDs (NRI FD) are the only two FDs whose investment qualifies for tax exemption. However, all the FDs are subject to TDS of 10%. TDS is charged only if the interest earned is above INR 40,000 and (INR 50,000 for senior citizens).  To know the interest earned is above or below the TDS threshold limit, one can use multiple bank FD calculators available online.

One can use the Income Tax Calculator to calculate their tax liability. Scripbox’s Income Tax Calculator is online and free to use.

Is the penalty changed for early withdrawal?

SBI allows premature withdrawal on its FDs. However, it charges a penalty for the same. For deposits up to INR 5 lakh, for all tenures, the penalty is 0.5%. The deposits above INR 5 lakh but below INR 1 Cr have a penalty of 1%. For all deposits withdrawn with seven days of deposit, there is no penalty.

What is cumulative FD and traditional FD?

Cumulative FD is an FD where interest is compounded monthly and paid at the time of maturity. The interest earns interest in cumulative FD. Traditional FD or non-cumulative FD is the one where interest is paid out monthly, quarterly, half-yearly, or annually as per the investor’s choice.