SBI FD Interest Rates
| Tenure | SBI FD Rates 2020 | Senior Citizen FD Interest Rates |
|---|---|---|
| 7 days to 45 days | 2.90% | 3.40% |
| 46 days to 179 days | 3.90% | 4.90% |
| 180 days to 210 days | 4.40% | 4.90% |
| 211 days to 364 days | 4.40% | 4.90% |
| 1 year to 1 year 364 days | 4.90% | 5.40% |
State Bank of India (SBI) Fixed Deposit Interest Rates are between 2.90% and 5.40%. For senior citizens the FD rates are between 3.40% and 5.40%. The FD interest rate for other customers is between 2.90% and 4.90%. The interest rate offered depends on the deposit amount and tenure of the fixed deposit, along with the type of depositor. The FD schemes offer flexible tenure and high returns. It comes with facilities such as a loan against FD and lower minimum deposit limit.
- The bank offers different types of fixed deposit (FD) schemes to customers. You can deposit a fixed sum in your SBI FD account.
- Fixed deposits benefit with higher interest rates as compared to that on saving deposits.
- The amount has to be deposited in lump-sum for a fixed duration and a fixed interest rate will be applicable.
- Nomination and auto renewal facility are available.
- You cannot withdraw the money from account until maturity. To withdraw money from an existing FD account, you will have to break the FD, and will be charged a penalty.
In this post, we will discuss about features of State Bank of India Fixed Deposit Interest Rates, factors impacting the fixed deposit rate, types of SBI FD schemes, penalty on premature withdrawal, calculation of FD interest, State Bank of India FD Interest calculator and illustration, loan against SBI FD, and FAQs.
Features of SBI Fixed Deposit Rates
The features of fixed deposit rates by SBI are mentioned below.
- The highest FD rate for deposits of 3 years to less than 5 years is 5.30%.
- The highest fixed deposit rate by SBI for deposits of 5 years to less than 10 years is 5.40%.
- Senior citizens can earn an addition of 0.25% to 0.50% interest on FDs of any tenure.
- FD interest rates of SBI are applicable at the time of maturity. So, when the FD matures, you will receive the principal deposited amount, as well as the earned interest amount.
Factors Influencing the SBI FD Rate
State Bank of India offers best fixed deposit rates for FDs of long tenure, between 5 years and 10 years. The bank offers special rates to senior citizens. FD rates in SBI are influenced by the RBI’s monetary policies, credit demand, economic growth, and liquidity position of the bank.
Below-given are the factors affecting the fixed deposit rates in all bank and SBI:
- RBI Policies: As per guidelines of the Reserve Bank of India, changes in repo rate and CCR (cash reserve ratio), affects the fixed deposit rates in SBI, and that of all banks across all banking instruments.
- Economic State of the Country: The economic condition of a country is the biggest factor affecting FD interest rates of SBI. When India’s economy booms, people are willing to take larger credit to fulfil their business and personal requirements. Thus, at time of a high credit demand, SBI may offer higher rates of interest to motivate people to park their surplus savings in FDs.
- Recession: SBI FD interest rates decrease at the time of recession as RBI releases funds in the market. The RBI lowers the rates on cash reserves of banks, providing them with a greater liquidity. Because of low credit demand and high liquidity, State Bank of India fixed deposit interest rates, reduce.
- Inflation: Banks fix the rates on FD in a manner that the same is higher than the inflation rate. Thus, SBI FD rate is higher when inflation rises.
Types of Fixed Deposits Schemes by SBI
Below-mentioned are some of the FD schemes by State Bank of India.
- Regular Fixed Deposit: You can make investment in a regular FD and earn attractive returns. Those who can open this account include resident Indians, Hindu Undivided Families (HUFs), private or public limited companies, or trust and partnership firms.
- SBI Tax Savings Scheme: This scheme can be availed by HUFs and resident Indians to save tax under Section 80C of the Income Tax Act, 1961.
- Flexi Deposit Scheme: This fixed deposit scheme is similar to recurring deposits. Here, you can make multiple deposits in a month, any number of times. Thus, a one-time deposit is not mandatory. Interest is compounded quarterly.
- Reinvestment Plan: Here, the interest is paid at the time of maturity. Nomination facility is available. Residents Indians over 18 years of age can open this account.
- Money Multiplier Plan: You can link your bank’s savings account to this fixed deposit account and even earn tax benefits under the Section 80C. Eligible candidates include trust and partnership firms, resident Indians, HUFs, and private or public limited companies.
- SBI Multi Option Deposit Scheme: The FD account is linked to your current or savings account, where you can withdraw multiples of Rs. 1000 as per your needs. This scheme can be opted by NRIs, resident Indians, organizations, companies, and Hindu Undivided Family.
Penalty on Premature Withdrawal
Closing a term deposit prematurely can attract a penalty 1% interest on FD is deducted from the originally applied SBI interest rate on deposit of Rs. 5 lakhs to Rs. 1 crore. The provision for penalty on premature closing of State Bank of India fixed deposit is subject to change and can vary from a deposit scheme to another.
How to Calculate the SBI FD Interest Rates?
State Bank of India calculates interest on its fixed deposits on quarterly basis. To calculate the maturity value of your FD account with the bank, the following factors must be taken into consideration.
- FD Rates in SBI: The SBI FD interest rates for regular customers range between 2.90% to 4.90% for a deposit below Rs. 1 crore, and that for senior citizens is from 3.40% to 5.40%.
- Tenure: SBI provides a lower rate of interest for fixed deposits with a shorter tenure. Longer the tenure, greater is the rate of interest.
- Deposit Amount: The amount you deposit in the account is what you earn an interest on. Higher the deposit amount, greater interest you will earn. The minimum amount you have to deposit is Rs. 1,000.
- Compounding Frequency for the Interest: Depending on the interest compounding frequency, the rate shall differ. Compounding frequency can be annual, half yearly, quarterly, or monthly.
Illustration of SBI FD Rate Calculation: Manali opens a fixed deposit account with a deposit of Rs. 1 lakh. She selects tenure of 45 days. The SBI fixed deposit rate for such tenure is 2.90%. On maturity of the FD, Manali will earn an interest of Rs. 362.50 on the principal deposit of Rs. 1 lakh. Thus, the total amount to be withdrawn will be Rs. 100,362.50
Loan against SBI Fixed Deposit
The bank can provide a loan of up to 90% of the amount deposited in an FD account. However, the bank will not furnish a loan on any FD that is of another bank. As per your need, you can take an overdraft facility or demand loan. There are no repayment penalties or processing fees.
- Minimum and maximum loan amount is between Rs. 25,000 and Rs. 5 crores.
- You can obtain the loan from official branch of the bank or internet banking.
- Interest rate will be 1% more than the original fixed deposit rate.
- You can avail a concession of 0.25% interest rate if the loan is applied through the YONO/INB.
Frequently Asked Questions about SBI FD Interest Rate
Here are the FAQs on State Bank of India Fixed Deposit Rates:
The payment of interest is on the basis of a month, quarter, or year as per your need. If the payment is monthly, then it will be on a discounted rate. Thereafter, the interest will be calculated at the contracted rate even if the rates change later.
There is no maximum deposit limit. The minimum deposit amount is Rs. 1,000. Senior citizens can earn up to 0.25% extra interest on deposit amount over Rs. 10,000. For long term deposits, the highest rate is 6.20%. The tenure of FD is between 7 days and 10 years.
The penalty rate is 0.50% for all tenors for premature withdrawals up to Rs. 5 lakhs. The penalty rate is 1% for all tenors for retail term deposit of over Rs. 5 lakhs.
The interest rate is 1% or 0.50% lower than the applied rate at the time of deposit for tenure remained with SBI. Or the rate is 1% or 0.50% lower than the contracted rate. The calculation is on the basis of whichever rate is lower. No interest will be paid however on deposits maintained below 7 days.
There is flexibility to convert the regular interest payout on term deposits to cumulative interest payout (STDR), and vice-versa. In case of no maturity instructions, auto renewals will happen.
Disclaimer: All details on this page are for informational purpose only. The fixed deposit schemes and rates may change with a change in RBI policies and the bank’s policies. You can keep a check on SBI’s official website for current information.