SBI Best Scheme is a recurring deposit plan that permits salaried individuals to invest a fixed amount of money in their recurring time deposit account on a monthly basis and earn interest rates similar to fixed deposits. SBI offers two interest payment options, namely, periodic interest payment and cumulative deposit.
Opting for periodic interest payment would result in SBI transferring the interest earned at each interval to the individual’s checking account. The interest rates would remain constant throughout the deposit’s lifespan. After the maturity of the RD, the principal amount can be transferred to the individual’s checking account unless the deposit is renewed.
If the individual chooses the SBI cumulative deposit, they will receive credit for the net of TDS and interest earned upon maturity. The maturity amount of the RD can be calculated using the RD calculator.
TDS will be deducted at a rate of 10.3% in all SBI branches if the interest earned by an individual exceeds INR 10,000 in one year. If the individual’s IT PAN is not updated in SBI records, TDS will be deducted twice at a rate of 20.6%. Hence, updating the PAN on the RD is crucial.
The individual must add their SBI RD and other RD interest income to their taxable income for the year, and tax must be paid on this income based on the individual’s income bracket. Advance tax must be paid on the dates of advance tax payment (15 September, 15 December, 15 March, and 31 March) based on this calculation, estimating the interest income and all other income.
The bank will issue a Form 16A to the individual, providing details of RD interest and tax deposited from the government treasury. The TDS amount deposited by the bank with the tax department can be verified online in the individual’s 26AS statement on the IT department website or their net banking account. The TDS amount can be claimed as credit in their annual tax return.
Some of the leading SBI life insurance plans in 2019-20 include SBI Life – Shield Online Term Plan, SBI Life – Smart Money Planner Traditional Participating a refund Endowment Plan, SBI Life – Smart Humsafar Traditional Joint life assurance Plan, and SBI Life – CSC Saral Sanchay Traditional Non-Participating Endowment Plan.
The minimum tenure for opening a fixed time deposit account with SBI varies depending on the scheme. To obtain tax exemption from TDS, Form 15G/15H can be submitted to the bank if the specified criteria are met. The minimum deposit amount required to open an FD account with SBI also varies depending on the scheme.
SBI offers various investment plans for different durations, including 5 years, 7 years, and more. Some of the best saving plans in SBI include SBI Life – a refund plan, SBI Life – pension plan, SBI Life – child plan, and monthly saving schemes. The interest rate of 1 lakh in SBI varies based on the scheme and the deposit’s duration. Depending on individual financial goals and risk appetite, SBI Life can be a suitable investment option.