The State Bank of India (SBI) offers a type of fixed deposit (FD) called the reinvestment plan, where interest is paid only at the time of maturity. The regular interest is added to the principal, and the compound interest is calculated and paid. It is not like a normal FD, where interest is paid on a regular basis during the period of deposit. Let's know what the features of this unique FD of SBI are.
Eligibility:
In this FD, the citizen can open a minor (himself or through his guardian), HUF, firm, company, local body, and any government department account alone or jointly.
Time period:
The SBI reinvestment plan can be invested for a minimum period of six months and a maximum of 10 years.
The extent of investment:
In the SBI reinvestment plan, a person can deposit a minimum of Rs. 1,000. The main thing is that there is no ceiling.
Income tax:
As per the Income Tax rules in this plan, TDS is applicable. As per the income tax rules, the depositor has to submit Form 15 G / H to seek tax exemption.
rate of interest:
The interest rates in the SBI reinvestment plan are similar to fixed deposits. In this plan, SBI staff and SBI pensioners are provided a one percent higher interest rate than the prescribed interest rate. The plan provides an interest rate of 0.50% higher than the prescribed rate to senior citizens aged 60 years and above.
Prematurity Withdrawals:
The SBI reinvestment plan provides for a premature withdrawal facility. The penalty for prematurity withdrawals on retail fixed deposits up to Rs 5 lakh is 0.50%. The penalty on premature withdrawals for retail FD of more than five lakh and less than one crore is one percent.
Read also: Amazon Prime Video Series The Boys Season 2 aired: Why only 3 episodes
Tips and tricks to keep safe a credit card
How to check LIC policy status online: know here process
Image credit: iservefinancial