SBI Reinvestment FD Plan 2025
While a regular fixed deposit offers the depositor the option to withdraw the interest earned at regular intervals, the SBI Reinvestment Plan, as the name suggest, does not pay the interest out.
What it does instead is to take that interest and add it to the principal and then the whole amount earns compound interest. Once the fixed deposit matures the depositor is able to withdraw the original amount invested, along with all the interest that has been earned till date.
Features of SBI Reinvestment Plan
Account Type | NA |
Amount | Min: The minimum instalment that can be deposited into this FD is Rs. 1,000 Max: There is no limit on the maximum instalment that can be deposited in the FD. |
Eligibility |
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TDS | Tax will be deducted at source if the interest earned from the fixed deposit crosses Rs. 10,000 in a financial year. |
Loan against the scheme | This FD can be used to secure a loan. |
Nomination (if any) | This deposit allows for nominees to be named in case the primary holder passes away. |
Auto Renewals | The auto renewals depend on the maturity conditions of the deposit. If no maturity period is defined auto renewals will apply. |
Pre-mature closure | Available |
Penalty |
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SBI Reinvestment Plan Interest Rates
The FD interest rates offered on this scheme are the same as those that apply to other fixed deposits held with the bank.
Tenure | Rate of Interest for General Public | Rate of Interest for Senior Citizens |
180 days to 210 days | 6.25% p.a. | 6.75% p.a. |
211 days to less than 1 year | 6.50% p.a. | 7.00% p.a. |
1 year to less than 2 years | 6.80% p.a. | 7.30% p.a. |
2 years to less than 3 years | 7.00% p.a. | 7.50% p.a. |
3 years to less than 5 years | 6.75% p.a. | 7.25% p.a. |
5 years and up to 10 years | 6.50% p.a. | 7.50% p.a. * |
FAQs on SBI Reinvestment FD Plan
- What is the maximum amount that can be invested in this FD?
There is no limit on the maximum amount that can be invested in this fixed deposit.
- What is reinvesting interest in FD?
Reinvesting interest in FD is an option offered by the bank to the customer, where the interests earned on an FD can be reinvested in the FD to earned interest on the interest earned can be reinvested to earn interest on interest, leading to higher returns.
- Are there any tax benefits associated with the Reinvestment Plan?
Since this is not a tax saving fixed deposit, no tax benefits can be claimed on the amount invested in this account.
- If I have set a maturity period, Will the SBI Reinvestment FD auto-renew after maturity?
Auto renewals, or renewals, do not apply to deposits that have a fixed maturity periods. They only apply when a maturity is not selected.
- What if I am not liable to pay taxes?
If you are not liable to pay taxes then you need to submit forms 15G or 15H to the bank so that it does not deduct tax on the interest earned.
- Can I go in for a premature withdrawal?
Yes, premature withdrawals are permitted but they will be subject to certain penalties. For accounts that hold less than Rs. 5 lakhs there are no penalties but for accounts that have more than Rs. 5 lakhs the penalty applied can be a reduction of the applicable interest rate by 1%.
- Is reinvested FD interest taxable?
Yes, interest earned on reinvestment FD is taxable according to the tax bracket applicable for the investor. The tax can however be avoided, if the individual provides the bank with 15G or H form.
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