Fixed Deposits, often referred to as FDs, are one of the most popular and secure investment options in India. Among the many banks offering FDs, the State Bank of India (SBI) stands out due to its wide reach, government backing, and reliable interest rates. Understanding the interest rates on FD in SBI is crucial for individuals who are planning to park their money in a low-risk financial instrument that provides stable returns over time. SBI offers flexible tenures, different schemes, and favorable rates, making it a preferred choice for both short-term and long-term investors.
Overview of SBI Fixed Deposits
SBI Fixed Deposits are term deposits where an individual deposits a lump sum amount for a fixed duration and earns interest on it. At the end of the tenure, the principal along with the accumulated interest is returned to the depositor. SBI provides various types of FD schemes catering to the needs of different segments of customers including regular citizens, senior citizens, and NRIs.
Current Interest Rates on FD in SBI
SBI FD interest rates vary based on the deposit amount, tenure, and the category of the depositor. Generally, the rates range between 3.50% to 7.00% per annum. Senior citizens enjoy an additional 0.50% interest on select tenures. These rates are subject to periodic revisions by the bank based on RBI policy changes and market conditions.
Interest Rate Slabs (for Deposits Below â¹2 Crore)
- 7 days to 45 days 3.50%
- 46 days to 179 days 4.75%
- 180 days to 210 days 5.75%
- 211 days to less than 1 year 6.00%
- 1 year to less than 2 years 6.80%
- 2 years to less than 3 years 7.00%
- 3 years to less than 5 years 6.75%
- 5 years to 10 years 6.50%
Senior citizens are eligible for a 0.50% premium over the general rates, making long-term FDs even more beneficial for retirees.
SBI FD Schemes
1. Regular Fixed Deposit
This is a traditional term deposit for Indian residents with flexible tenure options and fixed returns. It is ideal for conservative investors seeking stable income.
2. Tax Saving FD
This FD has a lock-in period of 5 years and provides tax benefits under Section 80C of the Income Tax Act. However, premature withdrawal and loan facility are not available under this scheme.
3. SBI Annuity Deposit Scheme
Under this scheme, the depositor receives the maturity amount in the form of monthly annuities comprising both principal and interest. It is suitable for those seeking a monthly income from their investment.
4. Multi Option Deposit Scheme (MODS)
This scheme links the FD with a savings or current account and allows the depositor to withdraw in multiples of â¹1,000 as needed, without breaking the entire deposit.
How Interest Is Calculated
SBI calculates interest on fixed deposits quarterly. For tenures less than six months, interest is calculated using simple interest. For longer durations, it is compounded quarterly. The actual return depends on the tenure selected, and the frequency of compounding enhances the effective yield on longer-term deposits.
Benefits of Investing in SBI Fixed Deposits
- Safety: SBI is India’s largest public sector bank, ensuring high levels of trust and security.
- Attractive Interest Rates: Especially for senior citizens and longer tenures.
- Loan Facility: Depositors can avail of loans against FD up to 90% of the value.
- Flexible Tenures: Ranging from 7 days to 10 years.
- Automatic Renewal: Option for automatic renewal on maturity to avoid loss of interest.
- Premature Withdrawal: Allowed with a nominal penalty, offering liquidity in emergencies.
Eligibility and Minimum Deposit
Any Indian resident, including minors under guardianship, can open an FD with SBI. The minimum deposit amount is â¹1,000, and there is no upper limit for most schemes. For tax-saving FDs, the upper limit for claiming tax deduction is â¹1.5 lakh per annum.
How to Open an SBI FD
Through Internet Banking
- Login to your SBI net banking account
- Select the e-Fixed Deposit’ option
- Choose the deposit amount and tenure
- Submit the request and receive confirmation instantly
Through SBI YONO App
- Open the YONO app and login
- Navigate to the deposits section
- Choose the FD scheme and enter the required details
- Complete the process in a few steps
Through Branch Visit
- Visit the nearest SBI branch with KYC documents
- Fill out the FD application form
- Submit with cash or cheque for deposit
- Collect the FD receipt or certificate
Taxation on FD Interest
Interest earned on SBI FDs is taxable under the Income Tax Act. If the total interest exceeds â¹40,000 in a financial year (â¹50,000 for senior citizens), TDS is deducted at 10%. Depositors can submit Form 15G/15H to avoid TDS if their total income is below the taxable limit.
Who Should Invest in SBI FDs?
- Risk-Averse Individuals: Who prefer capital protection and guaranteed returns
- Retirees: Looking for stable income with minimal market exposure
- Tax Savers: Who wish to benefit from Section 80C by investing in tax-saving FDs
- Short-Term Planners: Who want to park surplus funds for short durations
Points to Remember
- Interest rates are subject to periodic changes. Always check current rates before investing.
- Senior citizens should explore special FD schemes with higher returns.
- Compare effective yield along with nominal interest rate for better understanding of returns.
Investing in Fixed Deposits with SBI is a secure and reliable way to earn steady income while preserving capital. With competitive interest rates, flexible options, and multiple schemes, SBI caters to a wide range of financial needs. Whether you’re planning short-term savings or long-term financial security, understanding the interest rates on FD in SBI helps you make an informed investment decision. Keep track of rate updates and use online calculators to estimate your returns before choosing the ideal tenure and amount to invest.