SBI Raises FD Interest Rates: 180 to 210 Days FD to Earn 6.00% Interest
Increase in Interest Rates on Fixed Deposits by SBI
State Bank of India (SBI), the country’s largest public sector bank, has raised the interest rates on fixed deposits (FDs). SBI has increased the interest rates on FDs from 4.75% to 5.50% for periods ranging from 46 days to 179 days. Similarly, for FDs ranging from 180 days to 210 days, the interest rate has been raised from 5.75% to 6.00%.
Likewise, for FDs with a tenure of less than 1 year, starting from 211 days, there will now be an interest rate of 6.25% instead of 6.00%. There has been no change in the interest rates for other tenures. These interest rates have been effective from May 15. These interest rates apply for FDs below 2 crores.
Fixed Deposit Interest Rates
Here are the interest rates for various tenures on fixed deposits:
- 7 days to 45 days: 3.50%
- 46 days to 179 days: 5.50%
- 180 days to 210 days: 6.00%
- 211 days to less than 1 year: 6.25%
- 1 Year to less than 2 years: 6.80%
- 2 years to less than 3 years: 7.00%
- 3 years to less than 5 years: 6.75%
- 5 years and up to 10 years: 6.50%
Tax Implications on Fixed Deposits (FDs)
Interest earned from FDs is entirely taxable. Whatever interest you receive on your FD within a year adds to your annual income. Your tax slab is determined based on your total income. The income earned from FDs is considered “Income from Other Sources”, hence it is subject to Tax Deducted at Source (TDS). When your bank credits the interest income to your account, it deducts TDS at that time.
Here are some key points regarding tax on FDs:
- If your total income is less than 2.5 lakh rupees in a year, the bank does not deduct TDS on fixed deposits. However, you need to submit Form 15G or 15H for this. In such cases, if you want to save TDS, submit Form 15G or 15H diligently.
- If your total income from all FDs is less than 40,000 rupees in a year, TDS is not applicable. If your interest income exceeds 40,000 rupees, then 10% TDS is deducted. Banks can deduct up to 20% TDS if you do not provide your PAN card.
- The limit for TDS on interest income exceeding 40,000 rupees applies to individuals under the age of 60. At the same time, senior citizens aged 60 and above are exempted from paying tax on FD income up to 50,000 rupees. If the income exceeds this limit, 10% TDS is deducted.
- If the bank has deducted TDS on the interest income of your FD, and it does not fall within the prescribed limit of your total income, you can claim the deducted TDS while filing your taxes. This amount will be credited to your account.
