SBI Reinvestment Plan: Interest rate, difference with other Fixed Deposit (FD), benefits explained
State Bank of India (SBI) Reinvestment Plan vs Fixed Deposit: The SBI reinvestment plan is basically a kind of Fixed Deposit plan, but with a difference.
State Bank of India (SBI) Reinvestment Plan vs Fixed Deposit: The SBI reinvestment plan is basically a kind of Fixed Deposit plan, but with a difference. According to the official SBI website, "instead of interest being paid out at a regular frequency during the period of deposit; here it is paid out only at the time of maturity." The bank adds the regular interest to the principal and compound interest is calculated on the whole amount and paid thereon.
In the regular Fixed Deposits, the account holders have the option to withdraw the interest earned at regular intervals.
Minimum & Maximum amount: One can make a minimum investment of Rs 1000, while there is no limit on maximum deposit one can make.
Rate of Interest: This is the same applicable to the fixed deposits with Quarterly compounding. But paid out on maturity only. The interest is paid quarterly and credited to the Principal account for compounding.
In SBI Fixed Deposit accounts, interest is paid at Monthly/Quarterly/Calendar quarter basis as per the requirement of the customer. The payment of monthly interest will be at discounted rate. Interest is paid at the contracted rate irrespective of change in the rates thereafter. Senior citizens get 0.25% extra interest rate for amount above Rs 10,000.
SBI Fixed Deposit interest rates
SBI Reinvestment Plan interest rates
Tenure: According to official website of the bank, this is minimum 6 months and Maximum 10 years.
TDS: Loan/Overdraft facility up to 90% of the invested amount plus accrued interest, at 1.00% above the STDR rate is applicable.
Auto renewal: This is exercised if maturity instructions are not given.
TDS deducted at prevalent Income tax rate is deducted if Form 15G/15H not submitted.
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