vedanta demerger5 min ago
SBI 5-Year FD vs RD: Which can offer higher returns on Rs 4,50,000 investment?
- Written by Shriti Aniraj
Published: Zee Business| Updated: Zee Business
Finance Minister Nirmala Sitharaman presented the Budget 2025 on February 1, shaping economic policies for the year. When considering safe investment options, Fixed Deposits (FDs) and Recurring Deposits (RDs) remain popular among investors. An FD is a lump sum deposit earning fixed interest, while an RD requires monthly contributions with compounded returns. SBI offers competitive rates for both options. Let’s compare the returns and benefits.
1/10
Understanding SBI Fixed Deposit (FD) returns
1/10SBI’s FD interest rates range from 3.50%-7.25% p.a. for the general public and 4.00%-7.75% p.a. for senior citizens.
Invested Amount: Rs 4,50,000 Estimated Returns: Rs 1,71,189 Total Maturity Value: Rs 6,21,1892/10
Understanding SBI Recurring Deposit (RD) returns
2/10SBI’s RD interest rate is 6.7% p.a. (compounded quarterly).
Invested Amount: Rs 4,50,000 Estimated Returns: Rs 85,242 Total Maturity Value: Rs 5,35,2423/10
Which investment offers higher returns?
3/10SBI FD provides higher maturity value (Rs 6,21,189) compared to RD (Rs 5,35,242). The difference in returns is Rs 85,947 in favor of FD.
4/10
Taxation on FD vs RD returns
4/10
FD Interest: Fully taxable under ‘Income from Other Sources.’
RD Interest: Also taxable under the same category.
TDS Deduction: SBI deducts 10% TDS on FD interest if it exceeds Rs 40,000 (Rs 50,000 for senior citizens).
5/10
Liquidity: FD vs RD
5/10
FD: Premature withdrawal is possible but with a penalty.
RD: Premature closure is allowed after 3 years with reduced interest.
6/10
Flexibility of deposits
6/10
FD: One-time lump sum deposit.
RD: Monthly deposits are required, making it ideal for systematic savings.
7/10
Loan facility against FD & RD
7/10
FD: Loans available up to 90% of deposit value.
RD: Loan up to 50% of the balance after 12 months.
8/10
Risk Factor: FD vs RD
8/10Both FD and RD are low-risk investments backed by SBI, ensuring capital protection and fixed returns.
9/10
Who should choose FD?
9/10
Investors with a lump sum amount.
Those seeking higher returns.
People who prefer a one-time investment.
10/10
Who should choose RD?
10/10
Individuals who want systematic savings.
People without a lump sum but can invest monthly.
Those who want disciplined savings with moderate returns.
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