State Bank of India (SBI) is the largest Indian public sector bank with branches worldwide. It represents about 1/4th of the market. Known for being a trustworthy bank, SBI provides various retail banking products, including fixed deposit (FD) accounts.
Due to their assured returns, FDs are the most accepted mode of investment among clients of all ages. SBI provides favorable FD interest rate held for the duration specified by the customer.
SBI Increases FD Interest Rates; Here Are The New Rates Effective From May 10
The State Bank of India (SBI) has increased the interest rates on several fixed deposits, which means a more significant return for depositors. According to an update on its official website, it has raised interest rates on any deposit equivalent to Rs 2 crore and above. The revised tariffs will be effective from May 10.
Also, SBI has raised bulk deposit rates by 40-90 basis points, which is effective immediately. Recently, Bajaj Financial, a non-banking finance firm, has also raised the Bajaj Finance FD rates by 10 basis points.
The hike in deposit interest rates follows the direction of the monetary policy committee (MPC). MPC raised the benchmark repo rate by 40 basis points to 4.40% in an off-cycle meeting to combat growing inflation.
SBI’s hike is 90 basis points for 5–10 years and 3-5 years. As a result, interest rates in these two categories have risen to 4.50%, up from 3.60% previously, according to the bank’s website.
Bulk deposits with maturities ranging from two to three years have been raised by 65 basis points to 4.25%, up from 3.60%. Furthermore, bulk deposits with 46 – 179 days and 180 – 210 days will earn an interest rate of 3.50%, up from 3 and 3.10% before. Similarly, deposits with maturities ranging from 211 days to less than a year will earn 3.75%.
What have SBI officials said about the new move?
A top SBI executive commenting on the increase in bulk deposit rates said that it is in line with the rise in the policy repo rate. He added that there is unmistakable evidence that liquidity in the system is declining over time. The deposit rate rise on bulk money is a precautionary measure to avoid resource issues in the coming months.
“Bulk counters have re-entered the market, and the system has been loaded with capital for the last two years,” the executive continued.
Before the MPC rate rise, interest rates were at their lowest point, resulting in negative actual returns for savers, with inflation hovering around 6%. The increase in deposit rates is a pleasant move for savers.
Incidentally, SBI raised its marginal cost-based lending rate (MCLR) by 10 basis points before the MPC’s repo rate rose. Following the MPC decision, Bandhan Bank, Kotak Mahindra Bank, Jana Small Finance Bank, Punjab National Bank, and Union Bank of India boosted interest rates on bank fixed deposits across different tenure baskets for retail clients.
Bajaj Finance increased interest rates by up to 10 basis points on fixed deposits (up to Rs 5 crore) with maturities ranging from 36 to 60 months, beginning May 10. The increased interest rates will apply to both new deposits and renewals of maturing deposits. As a result, deposits held for 36 to 60 months will earn a 7% return. Deposits between 12 and 23 months will receive 5.75% interest, while deposits between 24 and 35 months will make 6.40% interest, as was previously the case.
SBI FD Rates 2022
FDs with maturities ranging from 46 to 149 days will earn 50 basis points more under the revised rates. The interest rate on deposits of more than a year but less than two years has been raised by 40 basis points. 65 basis points have increased the interest rate on deposits maturing in two to three years.
The increase in FD is sharper for 3 to 5 years and 5 to 10 years. People will now receive interest at 4.5 percent, up from 3.6 percent previously.
Several banks are raising interest rates after the Reserve Bank of India (RBI) raised the repo rate by 40 basis points to an impressive 4.4% last week. A primary reason for doing so is to combat India’s growing inflation.
About SBI Fixed Deposit Interest Rate Calculator
The SBI Fixed Deposit calculator is a simple tool for quickly calculating the maturity amount and the interest receivable after the policy period. You can determine the right FD amount by inputting some basic information. The following are the procedures that an investor must take to compute Fixed Deposit rates using the FD Calculator:
- The money invested
- The offered interest rate
- The Fixed Deposit Account’s duration
- The compounding period might be annual, semi-annual, quarterly, or monthly.
- The FD Amount
An investor will understand the following after entering the following information:
- The FD’s maturity value
- The total interest earned during the whole term
SBI FD Interest Rates for Domestic Bulk Term Deposits that are INR 2 Crore & above
| Maturity Period | Deposit Amount (Rs.) | Interest Rate (p.a.) | Interest Rate (p.a.) |
| General | Senior Citizen | ||
| 7 days to 45 days | 2 crore and more | 3.00% | 3.50% |
| 46 days to 179 days | 2 crore and more | 3.50% | 4.00% |
| 180 days to 210 days | 2 crore and more | 3.50% | 4.00% |
| 211 days to less than 1 year | 2 crore and more | 3.75% | 4.25% |
| 1 year to below 2 years | 2 crore and more | 4.00% | 4.50% |
| 2 years to below 3 years | 2 crore and more | 4.25% | 4.75% |
| 3 years to below 5 years | 2 crore and more | 4.50% | 5.00% |
| 5 years & up to ten years | 2 crore and more | 4.50% | 5.00% |
The SBI FD interest rates 2022 for senior citizens are 50 basis points higher than the standard interest rates for all periods.
What are the different types of schemes State Bank of India offers?
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Fixed Deposit
Deposit a large sum in this account to access features such as variable interest payment options, assured returns, liquidity, and early withdrawal. The lowest deposit term is seven days, and the maximum deposit tenure is ten years. The deposit must be at least Rs.1,000. Senior persons can get 0.25% more on promises over Rs.10,000.
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Annuity Deposit Scheme
This account permits you to deposit the entire amount and receive it in equivalent periodic payments (EMIs). A portion of the principal is returned with interest on the diminishing principal amount. The interest is compounded quarterly and subsidized to the monthly amount.
The deposit duration might be 36, 60, 84, or 120 months. You must deposit so that the minimum monthly payout for the specified period is Rs.1,000. In addition, the minimum deposit must be less than Rs.25,000.
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Multi Option Deposit
Your savings or current account is connected to this kind of FD. You can withdraw money from this account in Rs.1,000 installments as necessary. The account balance will continue to collect interest at the initial rate. You can pick a term ranging from one to five years. The minimum deposit amount is Rs.10,000.
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(MACAD) Motor Accident Claims Annuity (Term) Deposit Account
The account is created to transfer the compensation awarded by the court or tribunal to car accident victims/claimants. The bank will give the credited amount to the victims/claimants in monthly annuity payments, including a fraction of the principal amount plus interest.
For the stated period, the minimum monthly payout is Rs.1,000. According to the court/tribunal, the term might range from 36 months to 216 months.
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Reinvestment Plan
Unlike other plans, the interest generated on this account will only be given upon maturity rather than every month. Interest is paid back to the principle, and compound interest is computed and paid on top of it.
Deposit terms might range from 6 months to 10 years. SBI classifies any deposit above INR 1 crore deposit as bulk deposits.
SBI FD Special Features and Benefits
You need to fulfill a minimum deposit tenure of 7 days to open an FD account. An FD account has a maximum deposit duration of ten years.
- SBI will accept any deposit of the value of Rs.1,000 or above.
- You may open an FD account online or go to your local SBI bank.
- Get low-interest rates on all maturities and schemes.
- Get low-interest rates on all terms and plans.
- Senior adults over the age of 60, SBI employees, and SBI pensioners are all entitled to higher interest rates.
- There is a nomination option available.
- Transfer the account between SBI branches.
- Interest might be paid monthly, quarterly, half-annually, yearly, or at maturity, depending on the plan.
Eligibility Criteria to open an SBI FD account
- Account ownership is held only by residents.
- Two residents can share account ownership.
- Minors with the approval of their parents/guardians or simply Karta of Hindu Undivided Families (HUFs)
- Organizations and firms
- Local governments and any government agency
What are the documents you need to submit?’
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An Identity Proof
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- PAN card
- Aadhaar card
- Passport
- Voter ID card
- Your Driver’s license
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An Address Proof
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- a) Your Aadhaar card
- b) Bank statement with a cheque
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Proof of Date of Birth
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- Service discharge certificate
- PAN card
- Aadhaar card
- Voter ID
Tax Benefits on State Bank of India Fixed Deposit
The State Bank of India provides the ‘SBI Tax Savings Scheme, 2006,’ with a minimum deposit of Rs.1,000 and subsequent deposits in multiples of Rs.100. The account allows for a maximum deposit of Rs.1.5 lakh. Although the account has a 5-year lock-in term, it can have a duration of up to 10-years. If you deposit money into this account, you will get income tax advantages under Section 80C of the Income Tax Act of 1961.
Senior citizens receive an extra 0.5 percent interest rate on the applicable rate. Similarly, SBI employees and pensioners are liable to a 1% surcharge at the appropriate rate.
Also, the bank will deduct tax at the source depending on the interest you gain on FD accounts throughout the bank’s locations. You will be charged TDS at a rate of 10%. Due to the pandemic, it has been cut to 7.5 percent between May 2020 and March 2021. If your annual income is lower than the basic exemption level, you can request your bank not to deduct tax at source after submitting Form 15G/15H.
Open an Online FD account with Kuvera
- You can choose any FD using your primary bank account associated with Kuvera.
- At Kuvera, you can check the tenure, investment amount, and interest rate of every FD account before investing.
- Kuvera has a line-up of the top FDs accounts and we will always update more lucrative options to this list.
- You can also avail 7.2% interest rate when you open an online FD Account with your current Savings Account at Kuvera.
Frequently Asked Questions
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Do premature withdrawals come with a penalty?
Premature withdrawals are usually subject to a penalty. For payments up to Rs.5 lakh, a 0.50 percent penalty would be levied for all tenures. Whereas, for deposits between Rs.5 lakh and Rs.1 crore on all terms 1% penalty is imposed.
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When can I avail the loan facility on the Tax Savings Scheme by SBI?
Upon completing the lock-in period of five years, you can get the loan facility on the SBI Tax Savings Scheme, 2006. This is also subject to the extant instruction of the term deposit.
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What will happen if I withdraw the FD before 7 days?
The minimum deposit tenure you have to adhere to is 7 days. If you withdraw before that, the interest for such a deposit will not be paid.
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If I fail to provide maturity instructions, what happens?
The account will automatically renew if maturity instructions are not provided while opening an FD account.
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Can I withdraw my FD balance before completing the minimum deposit tenure?
You won’t receive interest on the FD balance if you withdraw it before completing the 7-day minimum deposit tenure.
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FD accounts can be opened by more than two adults jointly?
Only two adults or one adult and one minor may open an FD account jointly by the bank’s rules. No other combination is allowed.
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