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    Overview of SBI Fixed Deposit

    Fixed Deposits (FD) are an essential mode of investment which enable one to secure their earnings and ensure consistent growth in savings. The State Bank of India (SBI) offers an extensive range of investment opportunities to its customers. The SBI Fixed Deposit schemes are held by rewarding interest rates that ensure high returns upon maturity. An investor can choose a tenor that falls within 7 days to 10 years. FD is considered as a safe and risk-averse investment as it is unaffected by market fluctuations.

    SBI FD Rates of Interest

    SBI offers FDs at competitive interest rates that range from 5.75%-6.75% for the general public. Senior citizens receive an interest rate that is higher by 0.50% than the regular rates. Individuals who are employees of SBI or are retired SBI employees are eligible for a 1% higher interest rate.

    SBI FD interest rates for deposits below Rs. 1 crore as updated in July, 2018:

    Tenure Regular Interest Rates Senior Citizen Interest Rates
    7 days-45 days 5.75% 6.25%
    46 days-179 days 6.25% 6.75%
    180 days-210 days 6.35% 6.85%
    211 days < 1 year 6.40% 6.90%
    1 year < 2 years 6.65% 7.20%
    2 years < 3 years 6.65% 7.25%
    3 years < 5 years 6.70% 7.30%
    5 years-10 years 6.75% 7.35%

    *For deposits less than Rs.1 crore

    The highest rates of interest of 6.75% and 7.35% are offered to the general public and senior citizens for a tenor of 5-10 years. Investors can either opt for a short-term deposit or go for longer tenors. The interest rates of SBI FD increase corresponding to the duration of the tenor.

    How to calculate using the Maturity Value Calculator?

    SBI offers an online service called the Maturity Value Calculator through its official website. Potential investors can get an estimate of the returns that they would receive on any SBI FD scheme that they are considering.

    The FD calculator can be utilized by following these simple steps:

    • Visit the official SBI website.
    • Click on ‘Calculators’ on the left side of the page and select ‘Maturity Value Calculator’ from the dropdown list.
    • Enter the principal amount that one wishes to deposit.
    • Next, enter the desired tenor along with the corresponding rate of interest.
    • Click on the ‘calculate’ option to obtain the ‘Maturity Value’ and ‘Interest Value’.

    It must be noted that interest is compounded on a quarterly-basis. This FD calculator enables a customer to choose an SBI FD plan that gives the maximum returns within a tenor that is ideal for an investor’s needs.

    What is the eligibility to open an SBI Fixed Deposit Account?

    The eligibility bracket to open an SBI FD account is identical to that of an SBI savings account. Any individual with a valid Aadhaar card and a Permanent Account Number (PAN) card or Form 60 as a KYC document, can apply for an FD account.

    Fixed Deposit Schemes Offered by SBI

    SBI offers a range of term deposit schemes to invest in.

    The list of SBI FD schemes are noted below:

    SBI Tax Savings Scheme, 2006

    Any individual who is an Indian resident or is the Karta of the Hindu family undivided family and has a Permanent Account Number (PAN) can avail the SBI Tax Savings scheme. The tenor for the deposit can be within the range of 5-10 years. The lower limit for deposit is Rs.1,000, while the upper cap is Rs.1,50,000 p.a. The rates of interests correspond to the regular FD rates. Tax benefits can be availed as prescribed under the Section 80C of the Income Tax Act, 1961. An account holder can opt for the nomination facility but cannot undertake premature withdrawals. Furthermore, the account holder cannot apply for a loan against the deposit.

    SBI Multi Option Deposit

    The SBI MOD is a variant of term deposits. These deposits are linked to the savings account of an individual and the pledged funds are highly liquefiable. Any deficit in an account holder’s savings account will be compensated by transferring funds from the MOD account. The remaining amount in the MOD account will earn interest as agreed upon while opening the deposit account. One needs to park a minimum of Rs.10,000 to open an MOD account. The tenor lasts between 1-5 years. Premature withdrawals are permitted with a corresponding penalty for the same. The interest income is subject to Tax Deducted at Source (TDS). The scheme also comes with a nomination facility.

    Reinvestment Scheme

    Reinvestment scheme is a kind of term deposit which provides the accumulated interest income only upon maturity. The interest rate is identical to the regular FD rates which get compounded on a quarterly basis. TDS is applicable to the interest income. The tenor lasts between 6 months and 10 years. This SBI FD scheme comes with a premature withdrawal facility. Any withdrawal before 7 days receives no interest. The penalty for a deposit below Rs.5 lakh is 0.50% and any deposit between Rs.5 lakh and Rs.1 crore gets a penalty of 1%. SBI offers loan against deposit and overdraft facility on this term deposit.

    SBI Flexi Deposit Scheme

    This deposit scheme availed by SBI allows for an account holder to invest a certain amount of money on a monthly basis. Unlike a Recurring Deposit, the size of the instalments is not fixed along with the frequency of investment in a month. The lower limit of an instalment is Rs.500. The balance limit for a financial year lies between Rs.5,000 and Rs.50,000. The tenor for the scheme ranges between 5-7 years. An investor can apply for premature withdrawal and the rate of interest will be 0.50% than the original rate. TDS will be applied to the interest. Facilities like nomination and loan against deposit are available as well. The rate of interest is identical to regular FD rates.

    Annuity Deposit Scheme

    SBI has introduced this deposit scheme in which the investor parks a certain amount of money and receives payouts as Equated Monthly Instalments (EMI). The payouts consist of interest that is compounded on a quarterly basis and a portion of the principal amount. Every instalment sees the interest of the diminishing principal amount. The interest rates are same as the regular SBI FD rates. The lower limit for monthly annuity is Rs.1,000 and the deposit should be above Rs.25,000. The tenor could be either 36 months, 60 months, 84 months or 120 months. Premature payment is allowed only after the demise of the account holder. SBI provides overdraft facility and loans against the deposit and the annuity payment that follows goes into the repayment of the loan.

    The following table shows the tenor duration and the limit of deposit that are available for SBI FD schemes:

    Deposit Scheme Tenure Balance Limit (in rupees)
    SBI Tax Savings Scheme, 2006 5-10 years 1,000-1.5 lakh
    SBI MOD 1-5 years 10,000-no upper cap
    Reinvestment Scheme 6 months-10 years 1,000-no upper cap
    SBI Flexi Deposit Scheme 5 years-7 years 5,000-50,000
    Annuity Deposit Scheme 3 years, 5 years, 7 years or 10 years 25.000-no upper cap

    How to open an SBI Fixed Deposit account?

    An individual can open an FD account in SBI by visiting the nearest SBI branch and filling out an application form. This would require KYC documents such as one’s Aadhaar Card as well as a Permanent Account Number (PAN) Card. To apply for schemes such as the SBI Multi Deposit Scheme (MOD), it is necessary to have a pre-existing savings account in SBI. One can also create an FD account online.

    The steps given below can be followed to create an SBI FD account online:

    • Ensure that one has access to the internet banking facility.
    • Visit the official SBI website and enter credentials such as username and password.
    • Click on the e-Fixed Deposit option which is placed at the top of the webpage.
    • The e-Fixed Deposit option would give a dropdown list that gives a choice between ‘Fixed Deposit’, ‘e-TDR/e-STDR under Income Tax Saving Scheme’ and ‘e-TDR/e-STDR (MOD)’.
    • Select the desired option from the list.
    • In case there are multiple bank accounts linked to internet banking, select the account from which one wishes to deduct the deposit amount.
    • The next step is to enter the size of the principal amount.
    • Select the ‘senior citizen’ if applicable.
    • Choose the ‘STDR’ option if one wishes the interest to be automatically compounded on a quarterly basis.
    • Choose the ‘TDR’ option if one wants to receive period interest payouts. Select the frequency of the interest.
    • Next step is to select from the maturity options i.e. ‘Auto Renew Principal and repay interests’ and ‘Repay principal and interest’. Follow this by entering the tenor for which the FD should be renewed.
    • Before accepting the terms and conditions, go through them carefully.
    • Click on ‘Submit’ to open your FD account and ensure that you receive a confirmation for the same.

    Does SBI Provide Tax Saver Fixed Deposits?

    SBI offers tax saver fixed deposit called SBI Tax Saving Scheme, 2006. The interest rates are identical to regular SBI FD rates. A minimum of Rs.1,000 has to be deposited in order to open this term deposit account. The maximum amount that can be deposited is Rs.1.5 lakh. Investors can enjoy the tax benefits on the income interest as dictated under Section 80C of the Income Tax Act, 1961. The tenor lasts between 5 years-10 years. SBI does not permit premature withdrawal under this scheme.

    Taxation on SBI FD Accounts

    The interest income gained on the SBI term deposits are susceptible to Tax Deducted at the Source (TDS). TDS is applicable if the interest income on an investment exceeds Rs.10,000 in a financial year. If an investor’s regular incomes falls below the taxable limit, they can produce the Form 15G/15H to gain tax exemptions.

    Key Features of the SBI Fixed Deposit Schemes

    The SBI term deposits promise high returns at competitive rates of interest. The FD variants include tax-saving schemes as well as the MOD scheme which enable funds to be liquefiable.

    The following indicate the important characteristics of SBI FD schemes:

    • Term Deposits are impervious to market fluctuations, making them a safe investment option.
    • The interest rates for term deposits range from 5.75% to 6.75% p.a. for general public and 0.50% higher for senior citizens.
    • Overdraft facility can be availed for schemes such as Annuity Deposit Scheme and Reinvestment scheme.
    • Nomination facilities are available for select term deposit schemes.
    • Tax-saving FDs can sought through the SBI Tax Saving Scheme, 2016. Tax benefits can be availed under Section 80C of the IT Act, 1961.
    • FD schemes such as the Multi Option Deposit allows the account holder to easily withdraw funds from the deposit.

    Can Loans Against Deposit be Applied for SBI Fixed Deposits?

    A select number of SBI term deposits such as the Reinvestment Scheme, SBI MOD and Annuity Deposit Scheme offer loans against the deposit. An investor of the reinvestment scheme can avail this facility for 90% of the deposit value whereas; Annuity Deposit Scheme permits this facility for 75% of the deposit value.

    Can you Get a Credit Card Against an SBI FD?

    An individual can apply for the SBI Advantage Plus credit card against a term deposit account in SBI. In case one does not have a term deposit account, they can apply for the credit card along with the SBI Fixed Deposit Form. The credit card will be issued after the verification of the necessary KYC documents. Post the payment of the annual charges and the joining fees, the account holder can choose from the Encash facility of either Rs.25,000 or Rs.50,000. The chosen amount would be treated as the deposit to open the FD. Monthly EMIs will be charged for 11 months based on the selected amount. The account holder will receive an interest of 9.25% p.a. for 555 days.

    Do SBI Fixed Deposits have Premature Withdrawal Facility?

    Premature withdrawals refer to the extraction of funds from a term deposit account before it reaches its maturity. Most of the SBI Fixed Deposit schemes offer the facility of premature withdrawal. The SBI Tax Savings Scheme, 2006, however, does not permit the account holder to prematurely withdraw or close the account before the completion of the 5-year lock-in period. The other FD schemes have a penalty charge attached to any premature withdrawal. A penalty of 0.50% will be charged on the interest for an FD below Rs.5 lakh. Deposits above Rs.5 lakh and below Rs.1 crore will be charged with 1% on the interest. A deposit which is withdrawn before 7 days will not receive any interest payout.

    Does SBI offer Fixed Deposits for NRIs?

    SBI has dedicated exclusive term deposit schemes for Non-Resident Indians. The FD schemes include Non-Resident External (NRE) Account, Non-Resident Ordinary (NRO) Account and Foreign Currency Non-Resident (Bank) Deposit (FCNR B). These schemes offer repatriability to the principal amount as well as the interest income. An NRE account enables an NRI or Person of Indian Origin (POI) to invest their foreign earnings in Indian Rupees as an individual or as a joint account. The interest gained in exempt from any kind of taxation. A Rupee loan can be availed against an NRE account. An NRO account allows an NRI to park their earnings originating in India as a term deposit. The interest income will be subject to TDS at a rate of 30.90%. FCNR (B) account is a deposit that can be made in acceptable foreign currency. The interest and the principal amount can be operated in the desired foreign currency hence, making it resistant to market fluctuations. Loans can be availed against the deposit either in Indian Rupees or foreign currency. The interest income is exempt from any kind of taxation.

    The interest rates for NRE and NRO FD accounts range between 6.70%-6.85% per annum. For FCNR (B) the USD rates range between 3.43%-3.44%, GBP rates lie between 1.43%-1.90%, EURO rates are between 0.01%-0.15%, CAD rates range between 2.27%-2.58%, AUD rates are 2.04%-2.54% and JPY rates lie between 0.02%-0.05%.

    The following table illustrates a comparison of the main features of SBI term deposits for NRIs:

    Features NRE NRO FCNR(B)
    Tenor 1 year-10 years 7 days-10 years 1 year-5 years
    Principal Repatriability Full repatriability Conditional for income up to $1 million Full repatriability
    Interest Repatriability Full repatriability Repatriable but eligible for tax deductions Full repatriability
    Tax liabilities Tax exemption on interest income Subject to taxation under the IT Act, 1961 Tax exemption on interest income
    Operative currency Rupees Rupees USD, GBP, CAD, JPY, EURO, AUD

    How to close an SBI fixed deposit account online?

    An SBI fixed deposit account can be closed online without any hassles in a matter of minutes. To close the account online, one must have an active internet banking ID and password.

    How to close an SBI FD

    • Log on to the SBI website
    • Log on to internet banking by providing the username and password
    • Click on the fixed deposit option
    • Choose the type of FD account you want to close and click on ‘Proceed’
    • Choose the ‘Close account prematurely’ option
    • Click on the ‘Confirm’ button to close the account. Please note that once the ‘Confirm’ option is chosen, the account will be closed. One cannot go back to choosing this option.

    About SBI

    State Bank of India is a government-owned corporation which was, until 1955, known as the Imperial Bank of India. The Government of India holds 58.6% shares in SBI and the remainder is divided amongst other shareholders. One among them is Life Insurance Corporation of India which is not a promoter for SBI but still holds 14.99% shares in the bank.

    With over 14,000 branches spread across India, SBI has a massive domestic presence which keeps increasing as it acquires more state banks. State Bank of India also has more than 150 branches in over 30 countries and can be found in cities like Ramat Gan, Toronto, Moscow, Frankfurt, Colombo, Tehran, Hong Kong, London, Johannesburg, Los Angeles and even Sydney.

    The bank started out with 8 subsidiary banks but now, after 3 were absorbed into SBI, it is left with only 5 which are State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. Apart from its banking subsidiaries, SBI also has non-banking subsidiaries which are:

    · SBI Capital Markets Ltd

    · SBI Funds Management Pvt Ltd

    · SBI Factors & Commercial Services Pvt Ltd

    · SBI Cards & Payments Services Pvt. Ltd.

    · SBI DFHI Ltd

    · SBI Life Insurance Company Limited and

    · SBI General Insurance

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