The State Bank of India offers a diverse range of deposit schemes to facilitate both long and short term investments for individuals. Being the largest bank in India, SBI’s schemes are backed by decades of superior returns and appreciable performance, making them some of the most trusted investment options among consumers.
SBI offers attractive RD interest rates to its customers with a minimum deposit amount starting from just Rs. 100. SBI allows opening an RD account for a period of 7 days to 10 years depending on the financial goals of the customer. The SBI recurring deposit interest rates offered by the bank on deposit less than Rs. 2 crores is 5.00% and 5.40%. Senior citizens are offered an additional interest of 0.50% on normal interest rates.
Like fixed deposits, recurring deposits also allow investors to build a savings corpus through monthly deposits, over a pre-decided period. Since the interest rate on recurring deposits is similar to that of fixed deposits, they provide higher returns than other savings schemes.
Additionally, with recurring deposits, individuals can avail the same interest rate on their last deposit that they make a year later, even if the interest rates have decreased at that time. Scroll down to know more about the interest offered by the bank.
In this article
- SBI Recurring Deposit Interest Rates 2021 (Below Rs. 2 Crore)
- SBI RD Interest Rates – Special Features
- SBI RD Premature Withdrawal Rules
- How to Calculate SBI RD Amount?
- Eligibility Criteria to Start an RD Account with SBI?
- Documents required for starting an RD account
- Types of SBI RD Accounts
- How to Open an RD Account in SBI?
SBI Recurring Deposit Interest Rates 2021 (Below Rs. 2 Crore)
Below given are the updated SBI RD rates as of 26th Feb 2021
|Tenure||RD Rates for General Citizens||RD Rates Senior Citizen|
|1 year – 1 year 364 days||5.00%||5.50%|
|2 years – 2 years 364 days||5.10%||5.60%|
|3 years – 4 years 364 days||5.30%||5.80%|
|5 years – 10 years||5.40%||6.20%|
SBI RD Interest Rates – Special Features
- The minimum deposit required to open an SBI RD account is Rs. 100 (deposit in multiples of Rs. 10 in case of a higher amount)
- The tenure of an RD account in SBI ranges from 1 year to 10 years
- Senior citizens can avail an extra interest rate of 0.50% over the regular rate of interest offered to general citizens
- Nomination facility is available so that you can nominate someone to collect your maturity amount
- SBI offers the facility to take loan against deposited amount; one can avail 90% of the RD balance as the loan amount
- TDS deduction on RD is applicable and subject to the existing income tax rules at the time of opening the account
- In case of late payments, a penalty is levied by the bank which is:
- Tenures ranging up to 5 years or less – Rs. 1.50 for Rs. 100 per month
- Tenures more than 5 years – Rs. 2 for Rs. 100 per month
SBI RD Premature Withdrawal Rules
SBI allows its customers to withdraw their RD money prematurely. If the money is withdrawn before maturity, there will be a nominal penalty. However, SBI doesn’t allow partial withdrawals of recurring deposit.
How to Calculate SBI RD Amount?
The primary motive behind opening an SBI RD account is to get some surplus amount on savings. The maturity amount relies on several factors such as the deposit amount, interest rate, the RD tenure, TDS and other similar factors. The easiest way to calculate the interest on your recurring deposit is to use an SBI RD calculator which you can get over the internet easily.
The formula used to calculate the total amount accumulated upon maturity is A = P(1+r/n) ^ nt.
- A is the final amount
- P is the principal
- r is the annual interest rate
- n is the number of times that interest has been compounded,
- t is the tenure
Eligibility Criteria to Start an RD Account with SBI?
To open an RD in SBI Bank, individuals have to comply with the following eligibility criteria –
- Only Indian residents or members of a Hindu Undivided Family can open a recurring deposit account.
- Non Residential Indians can also have a recurring deposit account with SBI provided they apply for Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account.
- In the case of minors, individuals can open an RD account provided that their finances are monitored by their legal guardians.
Documents required for starting an RD account
To open an SBI RD account, you are required to submit any of the following documents mentioned below –
Proof of identity
- A voter ID card or Aadhaar card
- PAN card
- Government ID card
- Ration card
- A senior citizen ID card
Proof of Address
- Telephone or electricity bill
- Bank account statements with a cheque
- Any certificate or ID card issued by post office
Types of SBI RD Accounts
As of now, SBI offers three types of recurring deposits, viz. The regular recurring deposit, the SBI holiday savings account, and the SBI Flexi Deposit Scheme. Let’s have a quick look into each one of them:
SBI Regular Recurring Deposit: This one is the basic and the most preferred recurring deposit account offered by the bank. It can be opened with a minimum monthly deposit of Rs. 100 or more. The tenures can be anything between 1 year to 10 years.
SBI Holiday Savings Account: A savings scheme specially designed for people who love to travel. Under this scheme, one can save on a travel package through Thomas Cook. You can choose a Thomas Cook Holiday savings account package through Thomas Cook while traveling and the amount will be split into 13 EMIs. The EMI amount can be deposited every month in the SBI Holiday Savings Account for 12 months, and Thomas Cook will provide the 13th EMI after adding in the applicable interest rate.
SBI Flexi Deposit Scheme: As the name clearly suggests, under this scheme, you can change the deposit amount every month instead of paying the fixed amount. At least Rs. 5000 deposit is needed per year and it should not exceed Rs. 50,000 annually. The deposits can be made for 5 to 7 years.
How to Open an RD Account in SBI?
A recurring deposit account with SBI can be opened in two ways:
- Offline method – By visiting the branch
Visit the nearest SBI branch and fill an RD opening form and submit the required documents.
- Online method – Through Netbanking
If you are an existing customer of SBI and have an active internet banking account, use your net banking username and password to log in to your online account and open an e-RD right away. However, If you are not an SBI account holder, you need to open an account first. After the account is active, you can use the net banking facility and open an e-RD.
SBI Recurring Deposit Interest Rate – FAQs
Ques. How to Open an SBI RD Account?
- By visiting any SBI branch
- Through Netbanking
Ans. If you are already an SBI customer, all you need to do is log in to your account by using your net banking username and password and open an e-RD right away. If you don’t have an account in SBI, you need to get one first. Once your account is active, you can log in to net banking and open an e-RD.
Ques. What type of accounts are needed to open an SBI RD account?
Ans. Any savings or current account which is valid and in the active state can be used.
Ques. Can the maturity amount of an RD be moved to any account I want?
Ans. No, the maturity amount can only be moved to the account from which it was funded.
Ques. Does the RD interest rate changes every time the bank revises the rate?
Ans. No. The interest remains the same as in the time of opening an SBI RD account.
Ques. Can I withdraw just the interest amount and not the principal?
Ans. No. Either the full amount should be withdrawn, i.e. the interest + principal or convert the entire amount to a special term deposit scheme.
Ques. Does the bank provide any interest in the case of premature withdrawal?
Ans. Yes, you may receive some amount in the form of interest, but that depends on when you make the withdrawal. However, you will not get the maturity interest but a prorated interest rate.
Ques. How good is SBI RD?
Ans. Savings in any form is good and recurring deposits are one of the most preferred risk-free deposit scheme opted by people. The main motive is to earn some extra income on your savings as the money automatically gets debited from your account, you will be saving a fixed amount of money every month. However, recurring deposits are not ideal for people who want their savings to grow manifold; in that case, the money can be invested in mutual funds or a Systematic Investment Plan. SBI offers flexible deposit options with schemes like the SBI Flexi Deposit Scheme and SBI holiday savings account with which one can easily save money even more easily.