State Bank of India is the largest bank of India providing great services to its customers. From automated printer receipts of checks, to e-tax and e-Deposits; SBI offers the best of them all. For those who don't understand the functioning of the share market and want a secure, tension free investment option, Fixed Deposits are the best option. However, most of us don't do FDs just because of the hassle of going to bank and doing the paper work. Moreover, if there is sudden need of money and your savings account has less money, it can take some time to close the FD and get the money back.
To save you from this hassle, SBI and many other banks have started the facility of e-Fixed Deposits through which you can make your FDs online and close them anytime you want too thus maintaining the liquidity. This facility is available only for those customers who have an active online banking facility from their bank.
Here we would be comparing the 3 different Fixed Deposit schemes that are offered by SBI and what are their advantages and disadvantages. Before that a few common rules about these deposits:
- The name in FD, branch and mode of operation would be the same as that of the savings account.
- You can generate the slip of deposit with all relevant details and use it wherever you want to officially.
- You can use any savings, current, or OD account to debit the amount for the deposit.
- The amount will be refunded on maturity of pre-mature closing in the same account from where you funded the amount debit.
- The requests related to the deposit will be processed between 0800 hours IST and 2000 hours IST. The requests initiated beyond this period will be processed during the next opening hours of the branch.
- Deposits opened at branch cannot be closed online, they can be closed at the branch only.
- You cannot add a new nominee online, but if you already have a nominee listed through your branch then you can set an option to select the nominee for this deposit.
- e-TDR / e-STDR (Fixed Deposit) This is the common FD scheme in existence since the concept of Fixed Deposits came into existence.
- The minimum tenure for TDR is 7 days and for STDR it is 180 days. The maximum for both is 3650 days or 10 years approximately.
- The minimum amount for opening a deposit account under this scheme is Rs.1000 though it may vary for different product codes.
- No upper limit of deposit amount.
- Interest earned through this scheme is taxable.
- e-TDR/e-STDR under Tax Saving Scheme This FD scheme is a tax saving option where you can claim up to 1 lakh saving through this scheme. Even the interest is tax free.
- The minimum time period for this deposit scheme is 5 years and maximum is 10 years.
- You cannot close this FD and there is a 5 year lock-in period.
- The receipt has to be generated through Home branch.
- Minimum amount is Rs.1000 to open this deposit.
- Maximum savings through this scheme can 1,00,000 INR in one financial year.
- By default, at maturity the amount would be credited back to your account from where the amount was debited.
- e-TDR/e-STDR (MOD) This is an amazing scheme to get the best and safe return out of your money in bank without losing the liquidity of your money. This account is a combination of transaction and deposit account. In need, you can withdraw money from this account in denominations of Rs.1000 through your Debit card, Cheque or any other means.
- You can increment or decrement the amount in this scheme account in the multiples of Rs.1000.
- Minimum amount to open this deposit is Rs.10,000 and there is no upper limit. However, for different product codes the maximum and minimum may vary.
For interest rates on these deposits please refer the bank website as these may change over time. However, at the time of writing this article, the interest rate for deposits of 1 year and over for senior citizens is 9.25% and for others it is 9%.
|Author: Ashok Goyal 04 Jun 2014 Member Level: Diamond Points : 7|
Word of Caution while making eTDR with State Bank of India
While making out eTDR through net banking with SBI you must check the following:
1. Click on the Link "View Your Tax Credit" on the left side bar of the internet bank page of your account.
2. If it displays your PAN (Permanent Account Number), it is fine but if it says that no PAN number is mapped to this account then it is an alert for you before making out the eTDR online.
3. In such case visit the SBI Bank Branch and get your permanent account number filled in your Customer ID Profile.
4. In case you proceed with your intention to make an eTDR without following step at Sr.No.3 - then Bank will deduct TDS on interest @20% instead of normal TDS @10% in case of individuals.
5. However if you proceed with making eTDR after verifying the correctness of your PAN number as populated online as per step at Sr.No.2 then normal TDS will be deducted and you will be able to "View Your Tax Credit" online through link available on SBI personal banking.
6. If you are an agriculturist, senior citizen or having no other income then you will have to visit the bank branch every year in the month of April to get the form 15G or 15H attached to your customer ID so as to get exemption from TDS. Similarly you will have to ensure that your account is eligible for higher interest for senior citizens for which you will have to visit SBI branch for proper classification of your account.
|Guest Author: nikhil rathi 21 Aug 2014|
|The point you mentioned in the tax saving FD, of the interest being tax-free but the interest is not tax free. please clarify this as I had information about the interest being not tax free.|