State Bank of Mysore is one of five associate banks of the State Bank of India and has its headquarters in Bangalore, India. The bank was established under the patronage of Maharaja Krishna Raja Wadiyar IV in 1913 and was originally called The Bank of Mysore Ltd. The bank was chosen to conduct business for the government and also to conduct treasury operations for them from 1953 to 1960. After this seven year appointment, with the introduction of the State Bank of India (subsidiary Banks) Act 1959, the bank became a subsidiary of the State Bank of India in March of 1960.
Now SBM is an associate bank with SBI holding 92.33% of its shares. SBM has branches spread all over the country in cities like Bangalore, Mysore, Mumbai, Chennai, Hyderabad and New Delhi. It is also listed on the Bangalore, Chennai and Mumbai stock exchanges as MYSOREBANK. With over 700 branches all over the country, the bank employs over 10,000 people and has 80% of its branches in Karnataka itself.
SBM has a strong FD customer base owing to its unique FD products that serve the investment and savings needs of a variety of investors. FDs offered by State Bank of Mysore are a safe savings solution featuring guaranteed returns for a fixed period of time. Depositors are provided varying holding periods and reinvestment or pay out options to choose from in accordance with their funding and income needs.
Since SBM offers various fixed deposit schemes, the eligibility criteria also varies from scheme to scheme. There are schemes which can be availed by institutions, schools, corporates and individuals who are residents of India. There are some schemes which a non-resident too can apply for. In the case of minors, guardians can apply for fixed deposits.
State Bank of Mysore offers a variety of fixed deposit schemes which are targeted at particular individuals. Some of these are:
This fixed deposit scheme by SBM targets high net worth individuals and offers them a higher rate of interest. Anyone can open an FD under this scheme and the minimum amount for this scheme is ₹ 1 Cr. The maximum amount is ₹ 50 Cr. This FD can be held for a period of 7 to 179 days.
This term deposit scheme is only open to resident Indian’s and NRI’s are excluded from it. The minimum deposit for this scheme is ₹ 1 lakh and can go as high as ₹ 1 Cr. The duration that such a fixed deposit can be held for is 1 year to 3 years. This scheme can be applied for and operated by an individual or by more than one person making it a jointly operated scheme.
As the name suggests, this scheme is targeted at those who want to use fixed deposits to gain tax benefits. The maximum amount that can be invested under this scheme is ₹ 1.5 lakhs in one financial year. This deposit has to be made for a minimum period of 5 years and cannot be closed prior to maturity. This scheme offers investors tax exemptions for the invested amounts under section 80C.
Apart from these prominent schemes, SBM offers regular term deposit schemes where investors can invest in lump sums and hold them for periods ranging from 15 days to 10 years. They even have a scheme called ‘Harsha Deposit’ under which you can deposit money at your convenience without incurring penalties for irregular payments.
They also offer ‘Reinvestment Deposits’ which can be opened for periods of 6 months to 10 years. Under this scheme the invested amount and the interest earned on it will be paid to the investor only at the end of the duration of the deposit.
The minimum deposit that can be made with SBM under a term deposit scheme is ₹ 100 under the Recurring Deposit. This deposit can be made via regular payments every month and can be held for a period of 12 months to 120 months.
The maximum amount that can be deposited in an SBM FD account is ₹ 50 Cr. under the ‘Centenary Liquid Term Deposit’ scheme which is designed to benefit high net worth individuals by offering them higher interest rates and shorter durations of 7 to 179 days.
The minimum and maximum periods that funds can be held for in a fixed deposit with State Bank of Mysore changes according to the scheme the investor chooses to opt for. In case of regular term deposits, the minimum period is 15 days and the maximum period is 10 years.
In the case of the ‘Centenary Liquid Term Deposit’ the minimum and maximum periods are 7 days and 179 days respectively.
In case the investor opts for ‘Reinvestment Deposits’ the minimum period is 6 months and the maximum is 10 years.
For those individuals who already have accounts with SBM and have online banking facilities, there are options to open an FD online. However if you don’t have these facilities you can always visit any of the SBM branches to get help in opening an FD with them.
Interest rates offered by SBM on its fixed deposits vary from one scheme to another and are even dependent on the period for which you are opening the FD. The interest rates are split into three categories i.e. term deposits of less than ₹ 1 crore, Deposits between ₹ 1 to ₹ 5 crores and Deposits in excess of ₹ 5 crores. Interest rates vary according to the amount invested and range from 7.25% to 9%. Senior citizens get an extra 0.50% interest.
Yes, State Bank of Mysore does offer tax saver fixed deposits under the ‘SBM - Tax Saver Scheme’. This scheme allows investors to invest up to ₹ 1.5 lakhs every year and receive tax exemption for the entire invested amount for each year.
Yes, the interest earned from fixed deposits with SBM are taxable unless the investor has provided forms 1 G and 15 H. The tax applicable will be deducted at source as per provisions of the Income Tax Act, 1961.
Depending on the scheme opted for, fixed deposits with SBM carry the following features:
Yes, if you have opened an FD with SBM then you can take a loan against the FD except if it’s under the ‘Centenary Liquid Term Deposit’ scheme, where no loans are allowed against the FD.
Yes, SBM does offer special interest rates for senior citizens. This interest rate is 0.50% over and above the regular interest applicable for deposits made with SBM.
Yes, SBM will allow premature withdrawals of fixed deposits but the exact conditions may depend on the FD scheme that you have taken. If you have opened the deposit under the Centenary Liquid Term Deposit scheme then you won’t be charged a penalty for premature withdrawals if the deposit is held for a minimum of 7 days. If the FD is a tax saver FD than no premature withdrawals will be permitted for 5 years. In case your deposit is of an amount between Rs. 1 crore and Rs. 10 crores, if you withdraw in the first 15 days then no interest will be paid. However, if you go on for a premature withdrawal then the interest paid will be 1% less than the applicable rates. For deposits larger than Rs. 10 crores the penalty will be an interest rate which is 2% below the applicable rate.
Yes NIRs can open FDs with SBM through two different types of deposits. The first being an NRE and NRO deposits where the currency for transactions is the Indian Rupee and the other being the FCNR deposits which can be maintained in foreign currencies.
With an NRE deposit deposits can be opened for 1 to 3 years or 3 years to 10 years. The interest you can hope to earn will be 8.6% per annum in the first case and 8.65% per annum in the second.
With FCNR deposits the period of the deposits can range from 1 year to 5 years. The FD can be opened in either USD, GBP, EUR, CAD or AUD and the interest you earn will depend on the currency and the duration for which the deposit is opened.