If you want to get a tax benefit, you can open a Tax Saving Fixed Deposit (FD). The State Bank of India (SBI) offers the SBI Tax Saving Scheme that offers tax benefit for up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. This is a type of FD that comes with a lock in period of 5 years and comes with a range of other benefits. Fixed Deposits are one among the most popular investments used for saving tax as it offers security and a competitive rate of return on investment. It is very easy to open an SBI tax saving scheme FD online if you are an existing SBI customer. All you have to do is log in to your internet banking account and follow the given set of instructions. This is also a good investment option for senior citizens because the rate of interest is higher.
An interest rate of 6% is paid on SBI tax saving FDs for all individuals. Senior citizens, on the other hand, will be paid interest at the rate of 6.5%. These interest rates are applicable to all deposits that are less than Rs.1 crore.
| Tenure | Interest rate for individuals | Interest rate for senior citizens |
|---|---|---|
| 5 to 10 years | 6% | 6.5% |
*Interest rates are subject to change at the discretion of the bank
Summary of SBI Tax Saving Scheme FD features:
| S.no. | Criteria | Feature |
|---|---|---|
| 1. | Minimum deposit | Rs.1,000 |
| 2. | Maximum deposit | Rs.1.5 lakh |
| 3. | Tenure | 5 years to 10 years |
| 4. | Premature withdrawal | Not allowed |
| 5. | Loan facility | Not available |
It is very easy to calculate the interest that will be earned on an SBI tax saving FD. All you have to do is to use the FD interest calculator to find out the maturity amount that you will get on your investment. This tool can be very useful to help you decide how much you need to invest and learn how much you will actually earn. The following are the details required to calculate the interest you will earn on an SBI tax saving FD:
| Eligibility to Open a FD |
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| Documents Required |
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| Benefits of a SBI tax saving FD |
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Yes.
The principal amount is exempt from tax but the interest earned on the FD will be subject to tax if the interest gained is more than Rs.10,000 in a financial year.
It is recommended that you open the FD between 8.00 a.m. and 8.00 p.m. In case the FD is opened outside these hours, the request will be processed during the next working day.
Unfortunately, this cannot be done online. You will have to visit the branch physically to add a new nominee.
This is not possible. In case, you want to do the same, please make a visit to the nearest branch.
This will not be possible in case of tax savings schemes because they come with a certain predetermined lockin period.
Yes. You can choose a tenure that ranges anywhere from 5 years to 10 years.
Yes, this can be done without any hassle.
Useful Information on SBI Fixed Deposit
Other Fixed Deposit Schemes Offered by SBI
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One of the most popular banks in the country, State Bank of India (SBI) offers a wide range of investment opportunities to the general public. The term deposits and other saving schemes come with a promise of high returns at competitive interest rates. SBI Tax Savings Scheme, 2006 and SBI Flexi Deposit Scheme were launched by the bank to provide an opportunity for investors to boost their savings.
Key features of the SBI Tax Savings Scheme, 2006
The SBI Tax Savings Scheme, 2006, is a variant of a term deposit that can be availed by any Indian resident or the Karta of the Hindu undivided family. The prerequisite to apply for this scheme is to have a Permanent Account Number (PAN). The limit for deposit per financial year lies within Rs.1,000 and Rs.1,50,000. The minimum lock-in period for the deposit is 5 years and the maximum tenure is 10 years. An account holder cannot prematurely withdraw funds before 5 years. The account holder can enjoy tax benefits of up to Rs.1.5 lakh as prescribed in the section 80C of the Income Tax Act, 1961. SBI provides nomination facility for this scheme. However, they cannot apply for a loan against the deposit.
Main features of the SBI Flexi Deposit Scheme
The SBI Flexi Deposit scheme is similar to the Recurring Deposit (RD). However, unlike an RD, where an investor has to make regular monthly deposits of a fixed amount, Flexi Deposit lets you alter the instalments. Flexi Deposit scheme allows variations in instalments with respect to frequency and size of the deposit. The lower limit of the instalment is Rs.500 and the maximum number of instalments is 10. In a financial year, the amount deposited must be within the range of Rs. 5,000 and Rs.50,000. The account holder can base the frequency of the instalments upon their frequency. The tenure lies within 5 years and 7 years. The interest income earned is subject to Tax Deducted at Source (TDS) as mandated by the Income Tax Act, 1961. SBI allows loans to be taken against the Flexi Deposit and a nomination facility as well. A penalty of Rs.50 will be charged for non-deposit instalments. An account holder can avail for premature withdrawal at an interest rate lower by 0.50% of the original rate.
16 August 2018
