State Bank of India (SBI) helps you build your savings through a secure recurring deposit (RD) scheme. The bank allows you to make regular monthly savings at a higher interest rate as compared to the regular savings account.
Here is all you need to know about State Bank of India’s RD accounts.
- Recurring Deposit:
This is a regular RD scheme that allows customers to build up savings through regular monthly instalments for a pre-specified period. A designated interest will be paid upon maturity of the account. The minimum deposit amount is Rs.100 per month with no upper limit.
- SBI Flexi Deposit:
This variant of RD allows customers to deposit variable deposits instead of a fixed instalment. The minimum deposit tenure is five years, and the maximum is seven years. The minimum sum per financial year is Rs.5,000 and in multiples of Rs.500. Further, the minimum instalment must be Rs.500 at one instance. The deposit can be made at any time of the month and any number of times. A maximum of Rs.50,000 can be deposited in the account per financial year.
- SBI Holiday Saving Account (Thomas Cook):
State Bank of India has joined hands with Thomas Cook India to present the holiday saving account where customers can make monthly contributions, and the maturity amount will be transferred to Thomas Cook India. This is the payment for the pre-selected travel package from the ones listed under Holiday Savings Account packages on Thomas Cook India website.
The cost of the package will be divided into 13 parts, and the interest will be accrued over 12 months. At the end of 12 months, the proceedings will be transferred to Thomas Cook, and they will fund the 13th instalment for the package after factoring the accrued e-RD interest.
- SBI Holiday Saving Account (Cox & Kings):
SBI provides a way for you to save regularly, so your dream holiday is not just a dream, but a reality. SBI has brought this scheme in collaboration with Cox & Kings, specially designed for holiday goers. Make monthly savings in this scheme to avail a vacation package listed under Holiday Savings Account packages on Cox & Kings’ website.
The cost of the package will be divided by 13, where you pay 12 monthly instalments and at the end of the 12th month, the maturity proceeds will be transferred to Cox & Kings as payment for your pre-selected holiday package. The company will fund the 13th instalment after factoring in the accrued e-RD interest.
2. SBI RD Special Features and Benefits
- The minimum deposit tenure is 12 months and can go up to 120 months.
- The minimum deposit amount is Rs.100 per month.
- Earn attractive interest on the deposit.
- Senior citizens (individuals aged above 60 years) can get a 0.5% additional interest rate over and above the ones applicable to regular customers.
- Upon maturity, you can choose the ‘Payback Principal and Interest’ or ‘Convert to STDR’ option.
- The account is subject to TDS.
- Nomination facility is available.
- Universal Passbook will be issued for specific schemes.
- Overdraft facility of up to 90% of the deposit value is available.
- You can transfer the account among other branches of SBI.
- You can open the account either online or offline.
3. Basic Eligibility Criteria for SBI RD
- Resident individuals
- Senior citizens
- Minors
4. Tax Benefits on SBI Recurring Deposit
Recurring deposit accounts are subject to tax deducted at source (TDS). The TDS will be applied based on the Customer Information File (CIF) value, and the amount cannot be ascertained beforehand in the case of SBI Holiday Saving Account.
In the regular case, if your annual interest income from FD and RD accounts across branches exceed Rs.40,000 per financial year, TDS will be applied by the bank. The limit is Rs.50,000 per financial year for senior citizens.
You can submit Form 15G/15H, as applicable, to request the bank not to deduct tax at source if your annual income does not exceed the basic exemption limit. If TDS is applicable, it will be processed according to the income tax rules.
5. FD Interest Rate Calculator
Use our RD calculator to know how much return you can expect by investing a certain amount every month in RD over some time.
Frequently Asked Questions (FAQs)
Should I pay the penalty if I miss an instalment?
Yes. You will be charged a penalty of Rs.1.5 per Rs.100 per month in the case of maturity of 5 years. For a maturity above five years, a penalty of Rs.2.00 per Rs.100 per month will be charged for non-deposit of monthly instalments.
Is there a restriction on how many missed instalments are acceptable with a penalty?
A maximum of five missed instalments is allowed by the bank. If six consecutive instalments are not paid, the bank reserves the right to prematurely close the account and pay the account balance to the account holder.
Can I set the maturity instructions at any time before the account maturity date?
The bank accepts the maturity instructions only at the time of opening the account. However, you cannot change the instalment amount and tenure after opening the account.
Will the bank staff get any special privilege on opening an RD account with SBI?
SBI staff and pensioners are eligible for an additional 1% interest rate above the interest rate applicable to regular customers.
