Who is eligible for this scheme?

Residents of India or any undivided Hindu families with a Permanent Account Number (PAN) are eligible for this facility.

What is the minimum tenure for term deposit under this scheme?

The minimum tenure is 5 years within which you won't be able to withdraw funds from your account. However, after 5 years you may choose to close your account pre-maturely. But this has to be done from the home branch. Note that the maximum deposit period is 10 years.

In case of joint accounts, are both the parties entitled to get tax deduction?

No, only the first holder is eligible for tax exemption under Section 80C.

Can I transfer the maturity amount to any of my accounts?

No, you won't be able to do that. The maturity amount can only be transferred to the account from where the FD investment took place.

What type of accounts can I use to open my tax-saver account?

You can use savings, current, or overdraft account to open your deposit account. However, make sure that the account is an active one.

Is it possible to generate a receipt for my tax-saver account through internet banking?

No, you have to collect your account receipt from the home branch.

What is the minimum and maximum amount I can deposit in a year?

You can deposit a minimum of Rs.1,000 (and in multiples of Rs.100 thereafter) and a maximum of Rs.1.5 lakh in a year.

SBI Tax Saving Fixed Deposit (FD) Scheme

The SBI Tax Saving Fixed Deposit Scheme offers deposits the opportunity to earn an attractive rate of interest on lump-sum amounts up to Rs.1.5 lakh while also availing tax deductions of up to Rs.1.5 lakh (including other exemptions in this category as per the Income Tax Act, 1961). Senior citizens can avail 0.50% additional interest on their fixed deposit. There is a 5-year lock-in period for this due to the tax benefits.

State Bank of India (SBI) offers the Tax Saving Fixed Deposit Scheme, 2006, with which you can get tax exemptions on your investments. The scheme comes with a lock-in period of 5 years. Let's know a bit more about this plan.

Interest Rates on SBI Tax Saving FD

General depositors can get 5.40% p.a. as interest whereas senior citizens can get 6.20% p.a. You can deposit a minimum of Rs.1,000 and a maximum of Rs.1.5 lakh with this scheme. The lock-in period is 5 years before which you cannot withdraw funds from your FD account. Note that the interest rates are subject to change as per the discretion of the bank.

*Interest rates are subject to change at the discretion of the bank

Features and benefits of SBI Tax Saving FD

Summary of SBI Tax Saving Scheme FD features:

Account type	Term deposit/Special term deposit
Amount	Minimum: Rs.1,000 Maximum: Rs.1.5 lakh
Period	Minimum: 5 years Maximum: 10 years
Interest rate	5.40% p.a. (for general citizens) 6.20% p.a. (for senior citizens)
Premature withdrawals	Not Available
Loan	Not Available
Nomination	Available

*Interest rates with effect from 10 September 2020.

SBI tax saving FD interest calculator

It's recommended to calculate your SBI FD interest rate before hand so that you know how much returns you will receive in the future. In order to do that, you can use any online fixed deposit calculator. The easy-to-use online tool lets you calculate the maturity amount in no time. All you need to do is enter the relevant details, including the deposit term, investment amount, and the rate of interest.

How to open an SBI tax saving FD online

Step 1: Log in to SBI online banking using your username and password
Step 2: Go to the home page, navigate to the top menu and click on ‘e-fixed deposit’
Step 3: Now proceed to click on the ‘e-TDR/e-STDR under Income Tax Saving Scheme’ option and hit the ‘proceed’ button
Step 4: Choose the account from which the amount should be debited, type in the FD amount and if you are a senior citizen click on the ‘Senior Citizen’ option
Step 5: Proceed to choose if you want a cumulative (STDR) or a non-cumulative (TDR) FD, choose tenure, give maturity instruction, accept terms and conditions, and click on ‘Submit’
Step 6: A confirmation message will be displayed on screen

Key Information before Opening an SBI Tax Saving FD Scheme

Eligibility to Open a FD	Individual HUF
Documents Required	SBI Application Form Depositor’s photograph (2 copies) Identity proof & Address proof as per KYC Norms PAN Card copy/ Form 60 or 61 Aadhaar Card Details
Benefits of a SBI tax saving FD	Nomination facility Automatic renewal option after maturity Online operation for the FD account

SBI Tax Saving Fixed Deposit Scheme FAQs

Who is eligible for this scheme?
Residents of India or any undivided Hindu families with a Permanent Account Number (PAN) are eligible for this facility.
What is the minimum tenure for term deposit under this scheme?
The minimum tenure is 5 years within which you won't be able to withdraw funds from your account. However, after 5 years you may choose to close your account pre-maturely. But this has to be done from the home branch. Note that the maximum deposit period is 10 years.
In case of joint accounts, are both the parties entitled to get tax deduction?
No, only the first holder is eligible for tax exemption under Section 80C.
Can I transfer the maturity amount to any of my accounts?
No, you won't be able to do that. The maturity amount can only be transferred to the account from where the FD investment took place.
What type of accounts can I use to open my tax-saver account?
You can use savings, current, or overdraft account to open your deposit account. However, make sure that the account is an active one.
Is it possible to generate a receipt for my tax-saver account through internet banking?
No, you have to collect your account receipt from the home branch.
What is the minimum and maximum amount I can deposit in a year?
You can deposit a minimum of Rs.1,000 (and in multiples of Rs.100 thereafter) and a maximum of Rs.1.5 lakh in a year.

*All amounts, tenures, repayment requirements, interest rates, charges, fees, ceilings, requirements, criteria, exclusions, terms and conditions are as of 12 May 2020.

Useful Information on SBI Fixed Deposit

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Fixed Deposit by Other Institutes

News About SBI Tax Saving Fixed Deposit (FD) Scheme

Hopes of SBI reducing lending rates increases after FD rates cut
State Bank of India or SBI recently announced a steep slash in its fixed deposit interest rates. The move has raised hopes of the bank reducing its lending rates as well. One of the top lenders in India, SBI, said that it will bring down the interest rate on its retail long-term fixed deposits by up to 20 basis points. The bank also announced that it will slash rates by up to 35 bps for bulk deposits. For short-term deposits leading up to 179 days, the bank plans to slash rates by 50 to 75 basis points.

While speaking to the media, SBI CFO, Prashant Kumar said that the liquidity position has become more balanced compared to the situation in May and that the interest rates are also coming down. He further stated that the move is like a steppingstone to lowering of interest rates. He said that the extent of lowering of rates will be decided after the bank’s asset-liability committee meet in August.

Earlier this month, Reserve Bank of India (RBI) governor Shaktikanta Das expressed concern for transparent transmission of interest rate cuts after the central bank lowered the key repo rate by 75 basis points in 2019. The concern expressed by the governor prompted banks to act faster on the transmission of rate cuts.

1 August 2019

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