State Bank of India gives 3 per cent to 6.5 per cent annual interest to regular customers and 3.5 per cent to 7.5 per cent to senior citizens on fixed deposits (FDs) of different maturities.
SBI FD Scheme: The risk of investing in the stock market is always high. Not every investor has the ability to take market risks. In such a situation, a strong and evergreen option for safe and fixed income for them is Bank Fixed Deposits (Bank FDs). A major feature of this deposit scheme is that senior citizens get more interest than regular customers on schemes of different maturities.
Read More: Kotak Mahindra Life launches unit-linked term plan
The country’s largest public lender- State Bank of India (SBI)- offers its customers the option of FDs ranging from 7 days to 10 years.
On FDs of different maturities, SBI gives annual interest ranging from 3 per cent to 6.5 per cent to regular customers and 3.5 per cent to 7.5 per cent to senior citizens.
SBI FD Scheme: Rs 10 lakh will become Rs 20 lakh
Suppose, a regular customer deposits Rs 10 lakh in lump sum in SBI’s 10-year maturity scheme.
According to SBI FD Calculator, the investor will get a total of Rs 19,05,558 on maturity at a 6.5 per cent annual interest rate.
Read More: Understanding Mutual Fund SIPs: 7 ways in which SIP investments empower retail investors
In this, there will be fixed income of Rs 905,558 from interest.
On the other hand, if a senior citizen deposits Rs 10 lakh in lump sum in SBI’s 10-year maturity scheme.
According to SBI FD Calculator, senior citizens will get a total of Rs 21,02,349 on maturity at a 7.5 per cent annual interest rate.
In this, there will be a fixed income of Rs 1,102,349 from interest.
Read More: Rupee Falls 9 Paise To Settle At 83.27 Against US Dollar
SBI FD Scheme: Tax will be levied on interest earnings
Interest income on fixed deposits/term deposits of banks is taxable.
According to Income Tax Rules (IT Rules), Tax Deduction at Source (TDS) is applicable on FD schemes.
That is, the amount received on maturity of FD will be considered as your income and you will have to pay tax as per the slab rate.
According to IT rules, the depositor can submit Form 15G/15H for exemption from tax deduction.
On the other hand, customers can claim tax deduction of up to Rs 1.5 lakh under Section 80C on a 5-year tax saving FD.
