Good news for FD bankers in the bank-post office, will be applicable from April 1 rule
State Bank of India (SBI) offers a variety of investment products. Fixed Deposits (FDs) or Term Deposits are one of the key products.
Types of SBI Fixed Deposits
SBI Term Deposit
SBI Tax Saving Scheme, 2006
SBI Multi Option Deposit Scheme
Features of SBI Term Deposit scheme
Range of SBI FD rates: 5.75% p.a. to 6.85% p.a.
Highest Term Deposit rate: 6.85% p.a.
Range of maturities: 7 days to 10 years
Minimum deposit amount: Rs.1,000
No limit on the maximum deposit amount.
Senior citizens get an additional interest rate of 0.25% for deposits above Rs.10,000.
Interest payment options: Monthly, quarterly or yearly basis
Premature withdrawals allowed
An account holder can avail loans and overdraft for up to 90% of the deposit value.
Overdraft limit: Rs.25,000 to Rs.5 crore.
Interest rate for the loan would be 1% more than the FD rate.
Tax Deducted at Source (TDS) is applicable to the interest income as per the Income Tax Act, 1961.
Nomination facility can be availed.
The option for automatic renewal FD is available.
You can convert their interest payout frequency to cumulative payout at any point.
Features of SBI Tax Savings Scheme, 2006
Deposit range: Rs.1,000 to Rs.1.50 lakh.
Maturity period: 5 years and 10 years
The interest rate for SBI Tax Savings Scheme, 2006, is 6.85% p.a.
The account holder is entitled to tax benefits as listed under Section 80C of the Income Tax Act, 1961.
The FD account comes in two variants:
Term Deposit (TD)
Special Term Deposit (STD)
You cannot make premature withdrawals before completing 5 years of tenure.
You cannot apply for loans or overdraft facility against the deposit.
Features of SBI Multi Option Deposit Scheme (MODS)
Range of tenure: 1 year to 5 years
Minimum amount of investment: Rs.10,000
No upper limit on deposit amount
You can link your FD account to your Savings/Current account.
You can easily liquify your FD funds and transfer it to the linked account.
You will continue to earn interest on the remaining funds in the FD account.
The interest will be taxed under Tax Deducted at Source (TDS).
One can make withdrawals in multiples of Rs.1,000 only.
SBI MODS can be prematurely withdrawn.
Features of Reinvestment Plan
The interest income is only credited to your account on the date of maturity.
The interest income is consistently added to the principal amount.
The minimum amount of deposit is Rs.1,000.
There is no upper limit on the deposit amount
One can choose a maturity period from 6 months to 10 years.
Reinvestment Plan comes with facilities like:
Loan against the deposit
Overdraft facility up to 90% of the deposit amount
Auto renewal of the deposit (if no instructions are given)
Penalty for Premature Closure for SBI Fixed Deposits
In case of foreclosure of the FD before maturity date, a penalty will be imposed as thus:
The penalty for deposits up to Rs.5 lakh is 0.50%.
For deposits which are more than Rs.5 lakh but less than Rs.1 crore, the penalty rate is 1%.
Premature withdrawal from bulk deposits will be penalized with a rate of 1%.
source news 18
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