Tuesday, 22 April 2014

State Bank of India Fixed Deposit

Fixed Deposits or FDs are traditionally, the most popular form of investment among Indians. Being the safest investment avenue, FD investments are preferred by all sections of the society and all age groups. But it is important to choose the right bank and the right scheme to avail maximum benefits as well as to fit your individual requirement. Fixed deposit schemes offered by various banks are almost similar, but interest rates vary.

State Bank of India, the country's largest public sector bank offers attractive and flexible fixed deposit schemes to its customers. All fixed deposit schemes of SBI come with a flexible tenure range. The minimum balance stipulated to open a fixed deposit account with the state Bank of India is Rs. 1000. The bank offers a flexible tenure ranging from 15 days to as long as 10 years. Loan facility is available on all fixed deposit accounts with loan or overdraft facility available for as high as 90% value of the fixed deposit. The interest rates are compounded quarterly and fixed deposits are renewed automatically. Users can access the details of their fixed deposit accounts online using SBI's net banking module.
Sbi Fd Interest rate
Fixed Deposit

Eligibility and Documentation: All resident Indian nationals are eligible to open fixed deposit account with SBI. The interested customers need to provide copy of address proof and identity proofs (KYC documents), as mandated by RBI in order to open a fixed deposit account with the bank. Nomination facility is available for all SBI fixed deposit account holders.

Advantage of SBI Term Deposits: SBI offers various benefits for its term deposit holders. With its wide range of branches in urban and rural regions, reaching a SBI branch is much simpler and convenient compared to other branches. The stipulated minimum amount required to start a fixed deposit is Rs 1000 only which is far less than the minim threshold limit of most other banks. Loan and premature withdrawal facility is available for all SBI fixed deposit holders. The interest on fixed deposits can be reinvested as per the individual choice of the customer. All details of the fixed deposit account are available online for the customer.

Interest Rates for term deposits below Rs 1 Crore: The State Bank of India’s interest rates for fixed deposits are as listed below. The interest rate payable to SBI Staff and SBI pensioners is 1.00% higher than the applicable rates. The rate applicable to SBI Pensioners of age 60 years and above is 0.25% above the general payable rate.
Tenure General Interest Rates (w.e.f. 18.02.2014) Interest Rate for Senior Citizens (w.e.f. 18.02.2014)
7 days to 90 days 7.5 7.5
91 days to 179 days 7.5 7.5
180 days to 210 days 7 7
211 days to less than 1 year 7.5 7.5
1 year to less than 2 years 9 9.25
2 years to less than 3 years 9 9.25
3 years to less than 5 years 8.75 9
5 years and up to 10 years 8.5 8.75

Visit BankBazaar.com to understand the FD schemes offered by SBI and the various benefits associated with it.

Monday, 21 April 2014

Tax Saving FDs Vs. Regular FDs

Every bank, whether private or a nationalised bank, have fixed deposit schemes for their account holders. The aim of these fixed deposits are to help people save their funds, incomes for a particular term for a particular rate of interest and thus help these savings grow over the period of time. There are two major kinds of fixed deposits, one is the regular fixed deposit and the other is the tax saving fixed deposit.

Fixed Deposit
Fixed Deposit

What is a tax saving fixed deposit?

Tax saving fixed deposit is a type of saving which is done for a definite tenure of 5 years. The amount that needs to be saved is Rs 1 lakh and is mandatory for it to meet the criteria as a tax saving fixed deposit. This kind of saving attracts tax benefits as per the Section 80 C under Income Tax Act of India. The saving is tax free for a fixed amount of Rs 1 lakh and can be shown in individual declarations for tax saving purposes. Apart from the saving done on tax, there are attractive rates of interest that are prevalent on such schemes. 8 to 8.5 % per annum is the rate of interest on this fixed deposit. So, for a small some of Rs 1 lakh, one can get a decent amount on maturity. The disadvantage of this kind of fixed deposit is that it has to be locked for a period of 5 years and cannot be broken before the maturity of the term period. Also, no loan can be taken against the tax saving fixed deposit. The interest amount is taxable as per law which gets deducted at source before the final amount is reimbursed or transferred back into your account.

What is a regular fixed deposit?

A regular fixed deposit is an excellent way of saving money. There is no restriction on time or duration for which it can be saved. From as low as one month to 10-15 years as well. The rate of interest for deposit amount for at least a period of 2 years attracts great rates of interest. It is 9 % for all and 9.25 % for senior citizens. There are options on receiving the interest amount as well. One can go in for an option wherein the interest applicable as per the decided rates can be paid to the account holder on monthly basis, quarterly basis or even on maturity of the term deposit. In a way the regular fixed deposits are flexible in nature. These deposits can be withdrawn before maturity, although they attract some deductions but when in need, these can be withdrawn. Also, one can avail loan depending upon the total amount of fixed deposit at not a very high rate of interest. In such a way one need not break the fixed deposit as well. The interest amount is taxable and deducted at source and does not have any kind of tax saving benefits unlike tax saving fixed deposits.

Wednesday, 9 April 2014

Axis Bank Fixed Deposits

Axis bank is the third largest private sector bank in India with its headquarters in Mumbai. Axis bank offers a wide array of banking products including many deposit schemes to suit all your banking needs. The bank offers one of the best fixed term deposit schemes in India. You can open a fixed deposit with axis bank at any branch, if you have a savings account with Axis bank. You have to fill in the fixed deposit account opening form at the branch of your choice or can open a fixed deposit hassle free online from the comfort of your home or office.

There are many fixed deposit schemes for Axis bank for various duration's including simple reinvestment fixed deposits with very competitive interest rates. You can open a FD with a minimum investment of Rs 10,000 and add more amounts in multiples of Re 1 afterwards. The minimum fixed term for the simple reinvestment fixed deposits is 6 months.

Fixed Deposit

Axis Bank Fixed Deposit Schemes

Reinvestment Deposits: When you deposit an amount in the reinvestment fixed deposit scheme, at the end of each quarter the accrued interest will be invested with the principal amount and interest will be calculated on that total sum net of TDS (Tax Deducted Source). The minimum term for a reinvestment fixed deposit is six months.

When you open a fixed deposit, you can opt for the facility of automatic rollover for both the principal amount and interest on maturity. There are two options in the Account Opening Document (AOD).

Rollover only Principal: In this type of deposits, only the principal amount of your fixed deposit will be rolled over and the interest will be paid out or can be credited to the given account.

Rollover Principal and Interest accrued: In this scheme both the principal amount and the accrued interest will be rolled over for your fixed deposit term with the interest rates offered on the maturity date.
You can also make changes in the rollover terms of the deposits on or before the maturity date of the fixed deposit. You can change the tenure, maturity instructions, payment instructions, principal amount and the rollover schemes (You can change from the rollover of Principal scheme to rollover of Principal + Interest).
Withdrawals of Fixed Deposits

Axis bank allows you to withdraw the fixed deposit amount only from the branch where the deposit is made. The period for your fixed deposits is considered in number of days. If your FD is for tenure of six months and above, the interest will be calculated on a quarterly basis. The interest rate on the rolled over amount is calculated every quarter. If the tenure is less than six months, interest is calculated at simple interest.
If you withdraw the amount prematurely you will get the interest only at a rate applicable during the period of withdrawal.  There will be a tax at source deduction as per the Income Tax regulations.

Documentation: In order to open a fixed deposit, you must submit a valid photo identification card, a photograph and an introduction by any other bank or by an Axis Bank Savings Account holder for the last six months.