SBI’s High-Return FD Scheme : Planning your financial future can be overwhelming, especially with so many investment options available. If you’re looking for a low-risk, high-return investment backed by trust and stability, State Bank of India’s Fixed Deposit (FD) scheme is worth exploring. In this article, we’ll break down how you can earn ₹8.28 lakh in just 5 years with SBI’s high-interest FD scheme, using real numbers, tables, and insights to guide your investment decisions.
Why SBI Fixed Deposit is a Smart Investment
Fixed Deposits have always been one of the most reliable forms of investment in India. But what makes SBI’s FD scheme stand out? Here’s why thousands of Indians trust SBI FDs:
- Government-backed security and stability
- Competitive interest rates, especially for long-term deposits
- Senior citizen benefits with higher interest rates
- Flexible tenure options from 7 days to 10 years
- Quarterly and monthly payout options available
SBI Fixed Deposit Interest Rates: Updated 2025
Let’s take a look at the current interest rates offered by SBI for regular citizens and senior citizens as of April 2025. These rates are subject to change based on RBI’s monetary policies and internal bank updates.
SBI FD Interest Rates (Below ₹2 Crore)
| Tenure | Regular Citizens | Senior Citizens |
|---|---|---|
| 1 year – 1 year 364d | 6.80% | 7.30% |
| 2 years – 2 years 364d | 7.00% | 7.50% |
| 3 years – 4 years 364d | 7.00% | 7.50% |
| 5 years | 6.50% | 7.50% |
| 5-10 years | 6.50% | 7.50% |
| SBI Tax Saving FD | 6.50% | 7.50% |
Note: The interest rates are compounded quarterly in most schemes unless specified.
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How You Can Earn ₹8.28 Lakh in 5 Years
Let’s assume you’re investing ₹6,00,000 in an SBI FD for 5 years at a 6.50% annual interest rate, compounded quarterly. Here’s how your investment will grow:
Investment Projection Table
| Year | Opening Balance | Interest Earned | Closing Balance |
|---|---|---|---|
| 1 | ₹6,00,000 | ₹40,131 | ₹6,40,131 |
| 2 | ₹6,40,131 | ₹42,826 | ₹6,82,957 |
| 3 | ₹6,82,957 | ₹45,695 | ₹7,28,652 |
| 4 | ₹7,28,652 | ₹48,749 | ₹7,77,401 |
| 5 | ₹7,77,401 | ₹50,851 | ₹8,28,252 |
Total Returns Over 5 Years: ₹2,28,252
Effective Annual Yield: Approx. 7.58% with quarterly compounding
Benefits of SBI High-Interest FD Scheme
Investing in SBI’s fixed deposit scheme not only grows your money safely but also offers various additional benefits:
- Safe and secure returns with minimal risk.
- Easy liquidity options via premature withdrawal (with minor penalty).
- Loan facility against your FD up to 90% of the principal.
- Nomination facility and joint account options.
- Online FD booking via SBI Internet Banking or YONO app.
How to Open an SBI FD Account
Starting your FD investment with SBI is simple. You can open it online or by visiting your nearest SBI branch. Here’s what you’ll need:
- Valid ID proof (Aadhaar, PAN, Voter ID)
- SBI savings account
- Internet banking or YONO access (for online booking)
- Minimum deposit amount: ₹1,000
Steps to Open SBI FD Online
- Log in to SBI Internet Banking or YONO.
- Go to “Fixed Deposits” section.
- Choose “e-TDR/e-STDR” (Term Deposit).
- Enter amount, tenure, and interest payout preference.
- Confirm your details and submit.
Who Should Invest in SBI Fixed Deposits?
SBI FDs are ideal for conservative investors who prioritize safety over high returns. This includes:
- Retirees and senior citizens looking for regular income.
- First-time investors who want to start slow and safe.
- Parents planning for their child’s education or marriage.
- Individuals saving for a future down payment or emergency fund.
Comparison: SBI FD vs Other Investment Options
| Investment Option | Risk Level | Interest Rate (Approx) | Liquidity | Ideal For |
|---|---|---|---|---|
| SBI Fixed Deposit | Low | 6.50% – 7.50% | Medium | Safe long-term savings |
| Mutual Funds (Debt) | Medium | 5.5% – 8% | High | Moderate risk, higher return |
| PPF | Very Low | 7.1% (April 2025) | Low | Long-term tax-saving savings |
| Recurring Deposit | Low | 6.50% – 7.25% | Medium | Monthly savers |
| Stocks/Equity Mutuals | High | 10% – 15% (variable) | High | Long-term high risk-takers |
Taxation on FD Earnings
Interest earned on SBI FDs is taxable as per the individual’s income tax slab. Here’s how it works:
- TDS (Tax Deducted at Source) is applicable if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).
- You can submit Form 15G/15H to avoid TDS if your income is below the taxable limit.
- Income from FD must be declared under “Income from Other Sources” when filing ITR.
Tips to Maximize Returns from SBI FDs
- Choose longer tenures for higher compounded interest.
- Avoid premature withdrawal to ensure maximum yield.
- Stagger your investments with laddering strategy.
- Consider reinvestment plans for automatic compounding.
- Compare regular vs. senior citizen rates if eligible.
SBI’s Fixed Deposit scheme remains one of the most reliable and rewarding savings options in India. With competitive interest rates, government backing, and various flexible options, you can turn your ₹6 lakh into ₹8.28 lakh in just 5 years. Whether you’re a retiree, a young saver, or someone planning for life’s milestones, SBI’s FD offers a safe and smart way to grow your wealth.
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