State Bank of India or SBI, the largest lender of the country, offers a variety of products ranging from savings and fixed deposit accounts to tax-saving and gold monetisation schemes. One of these products offered by SBI is the SBI Reinvestment Plan, which works like a fixed deposit. The difference between an SBI fixed deposit and reinvestment plan is that instead of interest being paid out at a regular frequency during the period of deposit, in SBI reinvestment plan, the interest is paid out only at the time of maturity. Regular interest is added to the principal and compound interest is calculated and paid thereon, said SBI.
Here are key things to know about SBI reinvestment plan, a variant of SBI fixed deposit:
Instalments: The minimum instalment that one is required to deposit in SBI reinvestment plan is Rs 1,000. There is no maximum limit on the investment.
Interest rates: Interest rates on SBI reinvestment plan are the same as on fixed deposits. The following are the latest SBI FD interest rates on deposits below Rs 1 crore:
State Bank of India (SBI) FD Interest Rates
SBI revised its interest rates on retail fixed deposits with effect from August 30, stated sbi.co.in. The following FD interest rates are for deposits below Rs 1 crore:
(All figures in % per annum)
|Term||Interest rate for general public w.e.f. 30.07.2018||Interest rate for senior citizens w.e.f. 30.07.2018|
|7 days to 45 days||5.75||6.25|
|46 days to 179 days||6.25||6.75|
|180 days to 210 days||6.35||6.85|
|211 days to less than 1 year||6.4||6.9|
|1 year to less than 2 year||6.7||7.2|
|2 years to less than 3 years||6.75||7.25|
|3 years to less than 5 years||6.8||7.3|
|5 years and up to 10 years||6.85||7.35|
Tenure: The tenure of SBI reinvestment plan ranges from six months to 10 years.
Premature Withdrawal: A premature withdrawal facility is available on SBI reinvestment plan. For retail fixed deposit up to Rs 5 lakh, the penalty for premature withdrawal will be 0.50 per cent (all tenors); for retail fixed deposits above Rs 5 lakh but below Rs 1 crore, the applicable penalty will be 1 per cent (all tenors).
The interest shall be 0.50 per cent or 1 per cent below the interest rate applicable at the time of deposits for the period deposit remained with SBI or 0.50 per cent or 1 per cent below the contracted rate, whichever is lower. However, no interest will be paid on deposits which remain for a period of less than seven days.
TDS: SBI reinvestment plan is subject to a tax deducted at source. TDS is deducted at the prevalent income tax rate if Form 15G/15H not submitted.
Loan facility: Customers can avail a loan or overdraft up to 90 per cent of the money available plus accrued interest, at 1 per cent above the fixed deposit or FD interest rate.
Auto renewal: SBI exercises an auto renewal on the reinvestment plan if maturity instructions are not given.