SBI Fixed Deposit Features
SBI FD is one of the popular savings schemes amongst investors who prefer fixed income with low risk. Following are the features of this savings scheme:
Guaranteed Returns: SBI FD schemes offer guaranteed income at a fixed interest rate.
Tenure: The scheme tenure ranges from 7 days to 10 years
Minimum Deposit Amount: The minimum amount is INR 1,000 to open an FD account with State Bank of India.
Maximum Amount: There is no maximum limit on the deposit amount. Also, the bank accepts bulk deposits, i.e. deposits above INR 2 crore.
Fixed Deposit rates: The bank FD interest rate ranges between 2.50% to 5.50% p.a.
Senior Citizens FD Rate: SBI offers an additional 0.5% interest rate for senior citizens. Also, for all deposits held for more than five years, the bank offers 0.3% additional interest rate.
Interest Payouts: Depositors have an option to choose interest payout frequency (either monthly or quarterly).
Safety: SBI Bank provides insurance cover to all its investors for deposits up to INR 5,00,000.
Loan against FD: SBI Bank permits its depositors to avail a loan against their FDs. It is to help the investors meet their financial requirements without having to withdraw the deposit.
Nomination Facility: SBI Bank provides a nomination facility. The depositors can nominate beneficiaries for the deposits while opening the account.
Auto-Renewal: The bank has an auto-renewal facility.
Convenience: Depositors can start their fixed deposit scheme investments at their convenience. In other words, one can open an FD account either by visiting the nearest bank branch or through Internet Banking.
Types of SBI bank fixed deposits
- Regular Fixed Deposit Scheme
- Flexi Deposit Scheme
- Reinvestment Plan
- Annuity Deposit
- Tax Savings
What is an SBI FD Calculator?
SBI FD calculator is an online tool that helps in calculating the wealth gained by investing in an FD. In other words, it calculates the interest one can earn through their FD investment. The following are the inputs one has to enter in the FD calculator:
- Investment amount: It is the amount one wants to invest in an FD.
- Interest rate: It is the income that one can earn on the FD investment. The banks set it, and one can easily find it online based on the FD they want to invest.
- FD period: It is the number of nears one wants to invest in the FD
- Compounded: One can choose to receive interest regularly (monthly, quarterly, semi-annually and annually) or directly during maturity. Hence the compounding frequency can be monthly, quarterly or annually.
Once the above inputs are entered the calculator gives the following results/outputs:
- Total investment: It shows the total investment made in the FD.
- Wealth Gained: It is the interest income on the FD.
- Total Corpus created: This shows how much has the FD investment grown from the time of investment till maturity. It is the sum of total investment and wealth gained.
Following are the benefits of using SBI FD calculator:
- Simple and easy to use: The calculator is a simple tool, and the users can easily enter the inputs to get the desired output.
- Saves time: The calculator saves investors time by performing FD interest calculations with seconds.
- Accurate results: The calculator gives accurate results, and the chance of error is very less.
- Comparison: The calculator enables comparison of the maturity value of different FDs and helps choose the one which benefits them.
- Future planning: The calculator estimates the future value of an FD investment. This enables an investor to plan his/her investments and financial goals.
- Free to use: The calculator is available online, and investors are free to use it multiple times to calculate their potential return from multiple FDs.
How does an SBI FD Calculator work?
The SBI FD calculator is available online and is free to use. One has to enter a few basic details like investment amount and interest rate to find out the wealth created from an investment. The calculator works on future value formula, where it determines the value of an investment at a later date. Let's understand the calculator better with an example.
Ms Kavitha Kumar wants to invest an amount of INR 1,00,000 in an FD for five years. The bank FD interest rate is 5%. She wants to receive the interest annually. The maturity value of the investment for Ms Kumar can be calculated using the SBI FD calculator.
The inputs in the calculator would be:
Investment amount: INR 1,00,000
Interest Rate: 5%
FD period: 5 years
Once the above inputs are entered in the calculator, the outputs will be displayed. The outputs of the calculator are:
Total Investment: INR 1,00,000
Wealth Gained: INR 27,628
Total Corpus Created: INR: 1,27, 628
The investment of INR 1,00,000 made today at 5% interest per annum would be INR 1,27,628 in 5 years. The interest income for Ms Kumar will be INR 27,628.
Formula to calculate fixed deposit maturity value
The formula for calculation of the maturity value is
A = P (1 + r/n) ^ n*t
A – Maturity Amount
P – Investment amount
r - Interest rate
n - Number of times the interest is compounded
t - Investment tenure
How is FD interest calculated?
Let us understand how one can calculate SBI FD interest with the following example.
Ms Shanti opens an FD account with SBI Bank. The investment amount is INR 5,00,000. The tenure of the FD is ten years. Also, the applicable interest rate is 5.4% per annum. Furthermore, the interest gets compounded quarterly for the fixed deposit.
To calculate SBI FD interest amount and maturity value, one can use the FD formula.
A = 5,00,000 (1+5.4%/1)^1*10
A = INR 8,54,909
The maturity amount for Ms. Shanti is INR 8,54,909
Also, the interest earned is INR 3,54,909
The SBI offers higher interest rates for fixed deposit schemes than on savings accounts. Also, SBI compounds the interest every quarter. However, investors have the choice of choosing the interest payment frequency. Furthermore, the interest income is taxable in the hands of the investor. It is taxable as per the investor's applicable income tax slab rate.
The average interest rate for Indian banks is 5%. However, for SBI fixed deposit schemes, following are the interest rates:
The SBI FD rates for regular citizens:
- For an FD tenure ranging between 7 days to 45 days, it is 2.9%
- For the tenure ranging between 46 days to 179 days, it is 3.9%
- The FD rate for 180-364 days is 4.4%
- For one year to 2 years 364 days, it is 5.1%
- Three years to 4 years 364 days 5.3%
- Any FD with a tenure of 5-10 years is 5.4%
SBI offers higher interest rates for senior citizens. The SBI FD rates are as follows:
- For an FD tenure ranging between 7 days to 45 days, it is 3.4%
- For the tenure ranging between 46 days to 179 days, it is 4.4%
- The FD rate for 180-364 days is 4.9%
- For one year to 2 years 364 days, it is 5.6%
- Three 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 the SBI fixed deposit calculator. Scripbox's SBI 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 a fixed deposit account in SBI are:
- Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
- FD account opening form
- 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)
- 4 passport size photographs
- Age Proof (Birth Certificate, Matriculation Certificate)
- Bank saving account details like account number, IFSC code and branch
Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.
However, to invest in an FD, one has to be eligible. The eligibility criteria to invest in SBI FD is:
- Resident Individuals
- NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)
- Trusts and Societies
- Partnership Firms
- Public and Private Limited companies
better than FD
Short Term MoneyBetter than FD
Frequently Asked Questions
The highest SBI FD interest rate for regular citizens is 5.4% for a tenure of 5 years to 10 years. For senior citizens, it is 6.2% for a tenure of 5 years to 10 years. Returns from SBI FDs can be calculated using the SBI FD calculator. One can also use Scripbox’s fixed deposit calculator to calculate the maturity amount of an FD investment. Scripbox’s fixed deposit calculator is available online and is easy to use.
Investment in FDs does not qualify for tax saving under Section 80C of the Income Tax Act. Only Tax Saving FDs qualify for tax saving. In SBI, the only tax savings scheme is SBI tax savings scheme, 2006. Another FD that qualifies for tax saving is FCNR FD (NRI FD).The interest income from FDs is taxable as per the individual's income tax slab rate. Additionally, all FDs are subject to a TDS of 10%, and 20% if Pan is not provided. TDS is cut on interest income above INR 40,000 (INR 50,000 in case of senior citizens) from AY 2020-2021. Previously, TDS is cut on interest income above INR 10,000. In Budget 2020, the TDS threshold limit has been increased.One can use Scripbox's Income Tax Calculator to determine their taxable income. Also, they can determine the amount of taxes they can save by investing in different tax saving schemes.
Yes, SBI provides a loan against FD. One can get up to 90% of the deposit amount as a loan. The bank uses the FD as collateral. In the case of non-repayment of the bank loan, the bank uses the FD to recover the loan amount. The bank levies a 1% interest rate above the FD interest rate for the SBI loan as interest. The SBI loan repayment period is around 3-5 years. One can apply for the bank loan online or offline (bank branch). To apply for an online loan one can visit the bank's website. SBI offers loans such as loan against property (home loan), business loan, an education loan, etc., against an FD. The interest rate varies based on the bank and type of loan. One can calculate their loan EMI using Scripbox’s online loan EMI calculator. This loan EMI calculator works as a home loan calculator. It also works as a car loan EMI calculator and personal loan EMI calculator. One can also use this EMI calculator in multiple scenarios. They can do so by changing the personal loan interest rate, home loan interest rate and car loan interest rates.
Yes, SBI allows premature withdrawal on its FDs except for tax saving FDs. However, it charges a penalty for premature withdrawals. The penalty for deposits up to INR 5 lakh, for all tenures, is 0.5%. The deposits above INR 5 lakh but below INR 1 Cr have a penalty of 1%. There is no penalty for all deposits withdrawn within seven days of deposit.
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