Decoding the SBI FD Calculator: How Does it Work?: FDs are risk-free investment tools as they are not market-linked. They are very popular investment portfolios in fact over mutual funds, stocks, and insurance.
You can also get income tax benefits up to INR 1.5 lakhs by investing in FD for 5 years. These benefits customers will get under section 80C. The rate of interest offered by SBI bank is the highest as compared to other banks. You can use the SBI FD Calculator to calculate returns so that it will help you in making the best investment decision.
How Can the SBI FD Calculator Be Helpful?
Fixed Deposits have a variable rate of interest, which depends on the tenure. The longer the tenure more the rate of interest and vice versa. SBI offers FDs ranging from 7 days to 10 years with interest rates ranging from 2.90% to 5.10%.SBI gives benefits to senior citizens, they will receive an extra 0.5% over prevailing rates. Hence it is a very important tool to use while deciding about investment. To use our online FD calculator SBI, you just need to enter the value of the initial investment amount, rate of interest, and tenure. The total amount that you would gain from your SBI fixed deposit upon maturity, will be reflected within seconds.
Some of the benefits of using the SBI FD Calculator:
- It helps you make the right decision about your investment.
- Shows accurate and correct results as compared to manual calculation.
- It helps you to plan better and helps in making short-term as well as long-term financial goals.
- It will show your maturity after deducting TDS if you are a taxpayer.
Investment done with a combination of short-term and long-term deposits is one of the best ways to increase your investment. You can more returns on short-term FDs as compared to a savings account, similarly, you can get very good returns on your long-term FDs that can be helpful in your events like weddings, or any financial needs. Basically, it’s a tool that helps you make the right decision about investment and get the highest returns on your investment.
How Does FD Calculator Work?
The SBI bank FD calculator uses the following formula to calculate fixed deposit returns –
A = P (1 + r/n) ^ n*t
In the above formula –
- A is the amount you receive on maturity.
- P is the amount you are investing.
- r is the annual rate of interest.
- n is the number of times the interest is compounded. (For quarterly compounding, n will be 4; for half-yearly compounding, it will be 2; and for monthly compounding, it will be 12).
- t is the tenure of investment.
Let’s take an example to understand the formula better. You want to invest INR 10,000 for 5 years at 7% annual interest compounded yearly.
- P = 10,000
- r = 7%.
- n = 1
- t = 5
Hence, A = 10,000 (1 + 7%/1) ^ 1*5.
As per the above calculation, your invested amount will become INR 14,148 at the end of 5 years.
Overview of Fixed Deposits
|Fixed Deposits||A type of deposit where you can earn interest by depositing a fixed amount for a certain tenure.|
|Who Provides?||All Banks and NBFCs|
|How to Open||Can be opened online and offline|
|Risk Meter||No risk as it is governed by the RBI|
|Types of FDs||● Standard
● Tax Savings
● Senior Citizen
|Is there any fixed deposit scheme for NRIs?||Yes, NRE (Non-resident External) and NRO (Non-resident Ordinary)|
|Premature Withdrawal||Subject to Banks’ norms (Usually, there is a penalty on the interest rate)|
|How to Calculate FD Interest?||You can use the FD interest rate calculator available over the Internet.|
Types of Fixed deposits
There are different types of fixed deposits with different banks, usually, they are called products. There are basically two categories of fixed deposits, cumulative and non-cumulative deposits. In cumulative deposits, the interest is paid along with the principal amount at the time of maturity. But in the case of non-cumulative deposits, the interest is usually paid on a quarterly basis, if interest is paid monthly, it would be at discounted rates. Furthermore, you can avail of monthly, quarterly, half-yearly, or yearly interest payout at your convenience. Interest is compounded quarterly in case of cumulative deposit.
Let us know the different types of Fixed Deposits:
1. Standard Fixed Deposits
This FD is available with all banks. Some of the features are mentioned below –
- Money is deposited for a fixed tenure.
- The rate of interest is pre-determined by the bank only.
- The tenure for the FD will be between 7 days to 10 years.
- Interest rates of FD will be definitely higher than you will get with a savings account.
2. Tax Saving Fixed Deposits
As the name suggests, these deposits help in saving tax and are available with all the banks.
- One can get a tax exemption of 1.5 lakhs Rupees in a year using this type of FD.
- The lock-in period of this FD is 5 years, during which you cannot withdraw the amount.
- Only one time of lumpsum deposits are allowed in this type of FD.
3. Special Fixed Deposits
Like standard FD’s, these funds are also invested for specific time periods. The only difference is if you don’t withdraw the money for the specified period, you will earn higher interest on it than Standard FD’s.
D) Regular Income Fixed Deposits
If you have a limited income and depend on the interest from bank deposits for your monthly expenses, this type of FD is the best suited for you. One can opt for either a monthly or quarterly interest payout.
SBI Bank Timings
SBI delivers different products and services like FD, savings, loans, and much more. Most people still prefer going to the bank’s branch to carry out the transactions. The bank operates from Monday to Saturday, except for the 2nd and the 4th Saturdays of the month. The table below displays all of the SBI Bank Timings:
|1) SBI Bank Time (Monday to Friday):||9.00 a.m. – 12.30 p.m.
(Lunch in between)
1.30 p.m. – 3.30 p.m.
|2) SBI Bank Time on Saturdays:||9.00 a.m. – 12.30 p.m.
(Lunch In Between)
1.30 p.m. – 3.30 p.m.
|3) SBI Saturday Timings (2nd and 4th):||Closed|
|4) SBI Bank Office Time on Sundays:||Closed|