SBI Bank Fixed Deposit (FD) Reinvestment Option: Rate Of Interest, Tenure And Other Details
SBI (State Bank of India) offers various types of term deposits. A term deposit is a fixed-term deposit held at a financial institution. SBI offers reinvestment plan, a variant of term deposits but instead of interest being paid out at a regular frequency during the period of deposit, it is paid out only at the time of maturity. Regular interest is added to the principal and compound interest calculated and paid thereon, said the country's largest lender on its offcial website - bank.sbi.
Here's all you need to know about SBI's reinvestment plan:
Instalment limit: Customers willing to invest in this scheme need to pay a minimum of Rs 1,000. However, there is no maximum limit.
Rate of Interest: The interest rate is same as applicable to term deposits with quarterly compounding. Interest will be paid out on maturity only.
(Read: FD Interest Rates Of SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank Compared)
Tenure: The minimum tenure for SBI's reinvestment plan is 6 months and the maximum is 10 years.
Premature withdrawal: The facility of premature withdrawal is available. For retail term deposit up to Rs 5 lakh, the penalty for premature withdrawal will be 0.50 per cent. For retail term deposits above Rs 5 lakh but below Rs 1 crore, applicable penalty will be 1 per cent.
The interest shall be 0.50 per cent or 1 per cent below the rate applicable at the time of deposits for the period deposit remained with the bank or 0.50 per cent or 1 per cent below the contracted rate, whichever is lower. However, no interest will be paid on the deposits logged in for a period of fewer than 7 days.
Loan facility: One can avail a loan/overdraft of up to 90 per cent of the deposit amount plus accrued interest, at 1 per cent above the STDR (special term deposit) rate.
Auto renewal is exercised if maturity instructions are not given.
Tax deduction at source (TDS) is applicable and nomination facility is also available.
