SBI Scheme: If you are looking for an investment option for long term fixed income without taking the risk of stock market, then Bank FDs are a good option. The country’s largest bank SBI provides customers the facility of FDs from 7 days to 10 years. SBI gives 3% to 6.5% annual interest to regular customers and 3.5% to 7.5% to senior citizens on FDs of different maturities. SBI’s FD scheme is a good option for long term investment for senior citizens.
SBI Scheme: ₹5 lakh deposit will turn into ₹10 lakh in 10 years
Suppose, a regular customer deposits ₹5 lakh in lump sum in SBI’s 10-year maturity scheme. According to the SBI FD Calculator, the investor will get a total of Rs 9,52,779 on maturity at an interest rate of 6.5 per cent per annum. This will give a fixed income of Rs 4,52,779 from interest.
On the other hand, a senior citizen deposits Rs 5 lakh in a lump sum in SBI’s 10-year maturity scheme. According to the SBI FD Calculator, the senior citizen will get a total of Rs 10,51,175 on maturity at an interest rate of 7.5 per cent per annum. This will give a fixed income of Rs 5,51,175 from interest.
SBI FDs: Interest income taxable
Fixed deposits/term deposits of banks are considered safe. This is a good option for investors who do not take risks. 5-year tax saving FDs are eligible for tax exemption under Section 80C. However, the interest earned on FDs is taxable. According to the Income Tax Rules (IT Rules), Tax Deduction at Source (TDS) is applicable on FD schemes. That is, the amount received on maturity of FD will be considered as your income and you will have to pay tax as per the slab rate. According to IT rules, the depositor can submit Form 15G/15H for exemption from tax deduction.
