SBI FD Calculator: Getting fixed returns while keeping your hard earned money in a safe place is the first choice of every small and big investor. When it comes to savings and safe investments, people trust the country’s largest public sector bank i.e. State Bank of India (SBI) the most. Most people prefer to invest their savings in fixed deposits, as there is no risk involved like in the stock market. But before doing FD in any bank it is very important to understand how long your money will grow. The amount you get in your hand at maturity depends entirely on the bank’s interest rates and the investment tenure you choose. If a customer deposits Rs 1 lakh in SBI’s retail term deposit scheme, how much profit will he get at different times, let’s understand it with simple math.

What will be the return on investment?

State Bank of India is giving interest according to different time limits for general customers. If a common citizen invests his savings of Rs 1 lakh in SBI FD, the return he gets varies over time.

1. If you do an FD for a period of 1 year, the bank offers 6.25 percent interest per annum. Accordingly, after completion of one year, Rs. 1 lakh increased to around Rs. 1,06,398 will be. That means you will get a direct benefit of Rs 6,398 in a year.
2. If an investor deposits his money for 3 years, the bank offers 6.30 percent interest. At the end of 3 years tenure, this accumulated capital increased to around Rs. 1,20,642 occurs.
3. The bank is offering interest at the rate of 6.05 percent on investment for 5 years. After completion of 5 years, this amount of 1 lakh rupees becomes approximately 1,34,982 rupees.
4. If an investor leaves his capital in the bank for a long period of 10 years, he gets a huge benefit of compounding. After 10 years, an amount of Rs 1 lakh increases to approximately Rs 1,82,400.

Special benefits for senior citizens

Keeping in mind the financial security of senior citizens, banks always offer additional benefits. State Bank of India offers 0.50 percent (50 basis points) more interest than general customers to senior citizens aged 60 years and above. This small increase in interest has a huge impact on the maturity amount in the long run.

1. Senior citizens get 6.75 percent interest on 1 year FD. According to this, an investment of 1 lakh rupees increases to approximately 1,06,920 rupees in a year.
2. Senior citizens get 6.80 percent interest for a period of 3 years. At the end of the 3 year period, this deposit increases to around Rs. 1,22,430 is done.
3. Senior citizens get an excellent interest rate of over 7 percent ie 7.05 percent over a period of 5 years. According to this rate, Rs 1 lakh becomes approximately Rs 1,41,680 (approximately Rs 1.42 lakh) in 5 years.
4. The biggest benefit is seen over a longer period of 10 years. On completion of 10 years senior citizens Rs. 1 lakh to about Rs. 2,01,000 happens. This means more than doubling the elderly’s money in the long run.

Rules of tax liability on interest

Many investors often have this misconception that the money deposited in FD and the returns from it are completely tax free. But this is not true. As per the current income tax rules, the entire interest earned on fixed deposits is fully taxable.

How much tax you have to pay on your FD interest depends entirely on your total annual income. Besides, it also depends on whether you have opted for the old tax slab or the new tax slab of income tax. The tax liability on FD interest will be payable according to the tax bracket in which your total income falls.

Provisions regarding bank TDS deduction

Banks deduct tax at source i.e. TDS on FD interest after a certain limit. Investors should keep in mind that TDS is not a separate or additional tax.

When you file your Income Tax Return (ITR) at the end of the financial year, you can easily reconcile this deducted TDS with your total tax liability. If your total annual income falls within the tax exemption bracket and your tax liability is nil, you can claim back the TDS deducted by the bank as a refund by filing ITR.