How much interest on FD in SBI?
The State Bank of India (SBI) is one of the most prominent and trusted banks in India, offering a wide range of financial services to its customers. One of the most popular services provided by SBI is the Fixed Deposit (FD) scheme, which allows individuals to invest a certain amount of money for a fixed tenure and earn interest on it. In this article, we will discuss the interest rates offered by SBI on FDs and how much interest you can expect to earn on your investment.
Interest Rates on SBI FDs
The interest rates on SBI FDs are subject to change from time to time, depending on various factors such as the Reserve Bank of India’s (RBI) policy rates, market conditions, and the bank’s internal policies. As of the latest update, the interest rates on SBI FDs vary based on the tenure of the deposit and the amount invested.
For deposits with a tenure of less than one year, the interest rate offered by SBI is 2.75% per annum. For deposits with a tenure between one to three years, the interest rate is 3.25% per annum. For deposits with a tenure between three to five years, the interest rate is 3.50% per annum. For deposits with a tenure of more than five years, the interest rate is 3.75% per annum.
Calculating Interest on SBI FDs
To calculate the interest on your SBI FD, you can use the formula:
Interest = Principal x Rate x Time / 100
Where:
– Principal is the amount of money you have invested in the FD.
– Rate is the interest rate applicable to your FD.
– Time is the tenure of your FD in years.
For example, if you invest Rs. 1,00,000 in an SBI FD with a tenure of three years and an interest rate of 3.25% per annum, the interest you will earn is:
Interest = 1,00,000 x 3.25 x 3 / 100 = Rs. 9,750
Additional Benefits of SBI FDs
Apart from the attractive interest rates, SBI FDs offer several other benefits to investors. Some of these benefits include:
1. Tax benefits: Under Section 80C of the Income Tax Act, 1961, you can claim a tax deduction on the principal amount invested in an SBI FD up to Rs. 1,50,000.
2. Liquidity: SBI FDs can be prematurely withdrawn, but it may attract a penalty depending on the tenure and the bank’s policy.
3. Safety: SBI is a government-owned bank, which means your investments are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs. 5 lakh.
Conclusion
In conclusion, the interest rates on SBI FDs are quite competitive, and you can expect to earn a good return on your investment. By calculating the interest using the formula mentioned above, you can determine how much interest you can earn on your FD. Additionally, the various benefits offered by SBI FDs make it a safe and attractive investment option for individuals looking to park their money for a fixed tenure.
