Sbi Bank RD Interest Rates

About State Bank of India Recurring Deposit

SBI RDs are investments that allow investors to save small amounts regularly. The bank has a tenure of 12 months to 10 years, and the interest rates vary with the tenure.

SBI RD rates range between 6.25% to 6.75% p.a. for regular citizens. For senior citizens, the RD rates range between 6.75% to 7.25% p.a.. One can estimate the returns from their SBI RD investment using a recurring deposit calculator. The RD rates of SBI are higher than their saving account rates. The RD rate of interest differs based on the age of the investor, tenure of the investment, RBI policies and economic conditions in the country.

Interest earned on SBI RDs is taxable as per the individual investor’s income tax slab rates. Also, investors have to show it under the head ‘Income from Other Sources’ while filing their income tax returns. Moreover, the bank deducts a TDS of 10% if the interest income exceeds INR 40,000 for regular citizens and for senior citizens, the TDS threshold limit is INR 50,000. Furthermore, this rate applies only when the investor submits the PAN details or else, the TDS rate is 20%.

SBI Recurring Deposits Features

• Tenure: The SBI recurring deposit tenure ranges between 12 months to 120 months, in multiples of 3 months
• Minimum and Maximum Deposit Amount: The minimum amount of investment in SBI RD is INR 100, and in its multiples thereafter. However, there is no limit on maximum RD investment.
• Tax and TDS: SBI RDs do not qualify for tax savings. The interest income that one earns from SBI RDs is taxable as per the individual’s respective income tax slab rates. Moreover, SBI deducts a TDS of 10% if the interest income per annum exceeds INR 40,000 (INR 50,000 for senior citizens). The 10% TDS is applicable only when PAN details are provided; else the bank cuts TDS at 20%.
  One can determine whether SBI RD interest income is above or below the TDS threshold limit using the SBI RD Calculator. Also, investors can calculate their income tax liability using Scripbox’s Income Tax Calculator.
• Premature withdrawal: SBI allows investors to prematurely withdraw their recurring deposits. However, SBI charges a penalty as per their banking policies.
• Nomination Facility: Depositors can nominate beneficiaries for their SBI RDs.
• Convenience: Opening and managing recurring deposit investments are easy and convenient through SBI’s online portal.
• Loan Facility: SBI allows investors to take a loan against their recurring deposits as it helps in meeting their liquidity requirements.

SBI RD Account Eligibility and Documents Required

Eligibility: Following is the eligibility criteria for opening an SBI RD account

• Resident Individuals, including minors
• HUFs
• Sole Proprietary firms
• Partnership firms
• Companies
• Associations and trusts
• NRI’s

Deposit and account: One can open an SBI recurring deposit account with a minimum investment of INR 100 and in multiples thereafter. However, there is no limit on the maximum investment amount for SBI RD.

Documents Required:

• PAN Card,
• Aadhar Card,
• Driving licence,
• Government ID card,
• Senior Citizen Card
• Utility bills,
• Passport,
• Bank statement with cheque,
• Certificate or ID card issued by the post office

Withdrawal: SBI allows investors to prematurely withdraw their RD investment, however, with a penalty. The bank charges a penalty on the interest rate which can vary depending on the banking policies.

Nomination: SBI RDs have a nomination facility where the account holder can nominate beneficiaries.

Types of SBI Recurring Deposit Schemes

SBI offers the following recurring deposit schemes:

SBI Recurring Deposit

SBI regular recurring deposit scheme gives an opportunity to invest regularly a fixed sum over a specific time period. Also, accumulates a corpus where investors can plan to meet their financial objective at the end of tenure. 

• Tenure: 12 months – 120 months (in multiples of 3 months)
• Minimum Deposit Amount: INR 100, and in multiples of it thereafter.
• Maximum Deposit Amount: No limit
• Tax Deducted at Source: Applicable
• Nomination Facility: Available
• Loan Facility: Available
• Premature closure: Available, however, with a penalty based on banking policies. 
• Penalty for late deposits: If the instalment is delayed beyond the stipulated due date, then a penalty is levied on delayed payment of instalments. In case, six consecutive instalments are not received, the RD will be closed and the balance is paid to the account holder. 

SBI Flexi Deposit Scheme

The SBI Flexi Deposit Scheme offers convenience and flexibility to investors. This account has combined features of fixed deposit and recurring deposit accounts. Here, investors can take advantage of the auto sweep-in feature where they can select the instalment amount and number of deposits in the Flexi deposit scheme. Also, the interest rates it earns are the same as fixed deposits. 

• Tenure: 5 to 7 years
• Minimum Deposit Amount: INR 5,000 per financial year, and in multiples of INR 500.
• Maximum Deposit Amount: INR 50,000 per financial year
• Tax Deducted at Source: Applicable
• Nomination Facility: Available
• Loan Facility: Available
• Premature closure: Available, however, with a penalty of 0.50%. 
• Penalty for late deposits: If the instalment is delayed beyond the stipulated due date, then the penalty for default payment of the minimum deposit is INR 50. 

Conclusion

SBI RDs are considered a good investment option for investors who wish to save small amounts of money regularly. Recurring deposits are low-risk investments as they offer guaranteed returns over the investment period. Therefore, investors who are looking for fixed returns from their investments can consider investing in these schemes. However, one has to consider the taxes levied on the interest earned on SBI RD investments.

Frequently Asked Questions

Resources

1. SBI Mutual Funds
2. SBI SIP Calculator
3. SBI Fixed Deposit
4. SBI FD Calculator
5. SBI PPF Calculator