SBI TERM DEPOSITS | Features | Tax Benefits
SBI Term Deposits – Get Details on Term Deposits Features, Benefits, Process How it works. Liquidity etc on STate Bank of India.
Now you can earn a higher income on your surplus funds by investing those with us. We provide security, trust and competitive rate of interest.
- Flexibility in period of term deposit from 7 days to 10 years.
- Affordable Low Minimum Deposit Amount: You can open a term deposit with SBI for a nominal amount of Rs.1000/- only.
- Flexibility in choosing the amount you wish to invest and the maturity period.
- Payment of interest at quarterly basis/ calendar quarter basis as per requirement.
- Payment of interest on monthly basis will be at discounted rate.
Highlights
Safety – We understand the value of your hard earned money and continue to deliver on our promise of safety and security over 200 years.
Liquidity
Loan /overdraft facility: You can avail a loan/overdraft against your deposit. SBI provides you loan / overdraft up to 90% of your deposit amount at nominal cost. So you continue to earn interest in your deposit and still can meet your urgent financial requirements.
Premature Withdrawal
- There shall be no penalty for premature withdrawal of deposits below Rs. 15 lacs for tenure 7 days to 180 days provided these have remained with the bank for at least 7 days.
- However, for single deposit of Rs. 15 lacs and above, there shall be no penalty for premature withdrawal for tenure below 1 year provided these have remained with the bank for at least 7 days.
- In other cases of premature withdrawal, the interest shall be 0.50% below the rate applicable for the period the deposit has remained with the Bank or 0.50% below the contracted rate, whichever is lower. However, no interest will be paid if the deposit remains less than 7 days period.
- These instructions for premature withdrawals will apply only to fresh deposits and renewed maturing deposits.
Transferability– Transfer of Term Deposits between our wide network of branches without any charge.
Compounding / Flexible / Timely Payment of Interest – Under our Special Term Deposit Scheme, interest accrues in your account and gets compounded quarterly. Besides, we assure timely delivery of the proceeds of your deposit with interest, on maturity.Flexibility of payment on maturity through Cash (subject to prevalent Income Tax Act), Banker’s Cheque, Credit in Savings Bank/Current account.
- Term Deposits are available at all SBI Branches
- Easy and convenient access of 24X7 information at SBI Internet Banking.
- Nomination Facility – Available.
Tax Implications.
As per section 206AA introduced by Finance (No.2) Act, 2009 w.e.f. 01.04.2010, every person who receives income on which TDS as deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% (as against 10% which is existing TDS rate) in case of Domestic deposits and 30.90% in case of NRO deposits.
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Please further note that in the absence of PAN, Form 15G/H and other exemption certificates will be invalid even if submitted & penal TDS will be applicable.
Please confirm from your branch that your PAN is updated with the bank.
Tax Deductions for Term Deposits/ Reinvestment Plan (STDRs)
- TDS will be deducted when interest payable or reinvested per customer, per branch, exceeds Rs. 10,000 in a financial year.
- A consolidated quarterly TDS Certificate (Form 16 A) will be issued to you, containing details of all TDS deductions during the quarter.
- TDS Certificate shall specify valid Permanent Account Number (PAN) of the deductee, valid Tax Deduction Number (TAN) of the branch, Challan identification Number and receipt No of the quarterly statement. Challan identification Number means BSR code of the branch where tax has been deposited, date on which deposited and challan serial number given by the bank.
- If you are exempt from paying tax, you need to present Form 15H when you open a Term Deposit and subsequently at the beginning of the following financial year.
- TDS will be deducted on the basis of interest accrued on the Term Deposit(s) also even if the interest has not been credited/ re-invested.
In case of renewed deposits, the new deposit amount consist of the original amount plus interest less Tax Deduced at Source (if any), less compounding effect on TDS. At times, it may lead to recovery of TDS from the principal amount of the deposit.
Automatic Renewals
There is no need for you to keep track of the maturity of your deposits. Your deposits with us will be renewed automatically, post maturity and you continue to earn interest for same period as that of your matured deposit, at the interest rate prevailing at the time of maturity. Automatic renewals take place where there are no standing instructions for renewal.
Flexibility to covert your Special Term Deposit to Term Deposit and vice versa
- You can convert your special Term Deposit to a Term Deposit to receive monthly/quarterly interest payments to match your financial requirements. Quarterly interest at calendar quarter is also available.
- You can also convert your Term Deposit to a Special Term Deposit, which provides compounded rate of interest to multiply your money faster.
Most Important Terms & Conditions
- Interest will be paid at the contracted rate irrespective of change in the rate thereafter.
- Period of deposit 07 days to 10 years
- Loans / OD upto 90% of the Principal at 0.75% above the TDR rate
- Premature withdrawal facility available at 0.50% less interest than the actual period deposit has remained with the Bank. For tenors 7 days to 180 days No Penalty. However for tenor 7 days to 1 year, no penalty for a single deposit of Rs. 15 lacs and above.
- Quarterly compounded Interest
- Interest can be paid on monthly intervals on discounted rate.
- Interest can also be paid at Calendar quarter basis
- TDS at prevalent rate is deducted at source if Form 60 not submitted
- Auto renewal is exercised if maturity instructions are not given
10. Permission to convert TDR to STDR and vice versa required
11. Nomination facility available
