One of the largest banking institutions in India, SBI lets you open a recurring deposit account if you maintain banking services with the lender. In this scenario, you must deposit a certain amount of money at your chosen time. Once your selected deposit tenure is over, you are free to withdraw that money for future use. Based on the deposit, you earn a certain level of interest on the same.
The SBI RD Calculator is an advanced financial tool that helps you in finding an estimate of the maturity amount that one can attain through a Recurring Deposit (RD) account. It also calculates the interest secured on the investment. Also, in an RD, the interest is compounded for every quarter.
For all tenures, the interest rate on recurring deposits is 5.70 per cent per annum. Senior citizens receive 6.20 percent annual interest on SBI RDs.
Furthermore, this tool allows you to compute the returns you will incur after a specified time frame.
What is SBI Recurring Deposit?
Recurring Deposits, or RDs for short, are a particular type of term deposit provided by SBI. It is a mechanism for investing that enables consumers to make consistent deposits and receive respectable returns. It frequently offers users and individuals freedom and ease of investment due to the continuous deposit aspect and an interest component.
But it's important to understand that RDs are distinct from Fixed Deposits/FDs. RDs are generally adaptable. The owner of an RD account has the option to invest a set sum each month while receiving a respectable income. RDs make a great combination in terms of an investment as well as an equally competent saving tool.
Similar to fixed deposits, recurring deposits offer a competitive interest rate that differs from bank to bank. For General Citizens, the current SBI RD rates range from 5.00% to 5.40%. Due to the complexity of RD calculations, banks employ RD Calculators to determine the amount/return to be paid out upon maturity.
How to Use SBI Online RD Calculator?
When computing returns, SBI recurring deposit calculators are handy and straightforward. Simply enter a few values, such as the monthly investments, expected interest rates, and the length of your investment. Upon entering these details, the interest rate calculator will display the results on your screen in a split second. It will list the amount you invested, its returns, and the final value you will receive after the designated tenure.
What are the Basic SBI RD Details?
The interest rates for both general and senior citizens, along with the time of investment, are listed in the table below:
|Time||Recurring Deposit (RB) Rates for General Citizens||Recurring Deposit (RD) Rates for Senior Citizen|
|1 year to 2 years||5%||5.5%|
|two years - 3 years||5.1%||5.6%|
|three years - 5 years 364 days||5.3%||5.8%|
|five years - 10 years||5.4%||6.2%|
Benefits of SBI Recurring Deposit Calculator
The SBI Recurring Deposit Calculator can be easily used to determine how you should plan your recurring deposit investment. It guides you thoroughly figuring out how much you need to invest monthly to reach the desired corpus upon account maturity or any such financial goal. Below are some of the advantages of using the SBI Bank RD calculator:
- The smart AI-powered calculator takes a number of different factors and considerations to provide quick and accurate results.
- This calculator is straightforward to use and saves time as it avoids the hassle of manual calculations, which stand the chance of being inaccurate and time-consuming.
- It is only natural that you might want to plan your finances in the long run; this calculator helps you determine what amount you will have to invest every month. This way, you can plan your monthly expenses accordingly while setting money aside for future investment purposes.
- You get the opportunity to compare RD’s offered by two or more banks.
How is the Interest Amount on an SBI RD Computed?
The interest and maturity amount on an RD is computed through a simple mathematical formula:
M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )
- M denotes the Maturity Value
- R represents the amount deposited
- n is the desired tenure
I denotes Interest Rate /400
Based upon this formula you can compute the RD returns manually. Furthermore, the SBI RD calculator calculates the values through this formula to provide you with an estimated investment amount.
Let us see a quick example to understand how the procedure is used to compute these values.
You decide to invest INR 5000 in SBI RD per month for one year. The offered interest rate is 8%. So, the total value that you will secure after one year will be:
- R or Monthly Instalment is 5000
- n or Quarters will be 4
- I or Interest Rate will be 8.00/400
Inserting the values under the mentioned formula, the amount you stand to gain upon maturity will be INR 62, 647
SBI RD Interest Rates 2022
The following table represents the current SBI RD interest rates for general as well as senior citizens:
|Time||General Public SBI FD Rate||Senior Citizens SBI FD Rate|
|7 days to 45 days||2.9%||3.4%|
|46 days to 179 days||3.9%||4.4%|
|180 days to 1 year||4.4%||4.9%|
|1 year to 2 years||5.1%||5.6%|
|2 years to 3 years||5.2%||5.7%|
|3 years to 5 years||5.45%||5.95%|
|5 years to 10 years||5.5%||6.3%|
Note: The rate of interest mentioned in the above table came into effect from 15th February 2022 onwards.
Things to Consider while Calculating SBI Recurring Deposit
Before you head over to the SBI recurring deposit calculator and start adding the below-mentioned details to find out the amount you can earn upon maturity, you must consider some of the factors that you should consider. Some factors include the type of instalment, the interest rate and the deposit tenure. Once these steps are in check, you can open a recurring deposit account that suits your needs. These factors are explained in detail below:
- Monthly Deposit Amount: Usually, a larger deposit amount constitutes a higher interest rate. This means the higher your monthly deposit amount, the better the interest rates will be. You can adjust the deposit amount on the calculator to have it fit your financial requirements.
- Rate of Interest: The higher the interest rate, the more would be the monthly amount that goes into the deposit. Higher interest rates tend to add up in the long run. Hence, before you start your recurring deposit, compare all interest rate options in the calculator to see what works best for you.
- Deposit Tenure: The longer the deposit period, the higher the interest rate, and the shorter the period, the less interest you gain upon maturity.
Eligibility Criteria for an SBI RD Account
To open an RD account with SBI, individuals must fulfil the below eligibility criteria:
- Only Indian nationals or members of a Hindu Family (Undivided) are eligible to register recurring deposit accounts.
- To open an RD account, the person must have existing savings account with the State Bank of India.
- Individuals must have a reliable source of income.
- NRIs can also avail of the benefits of RD through NRO accounts and NRE accounts.
- In the case of minors, individuals can open an RD account provided that their finances are monitored by their legal guardians.
Documents Required for Opening an SBI RD Account
You will require a specified set of documents to open a recurring deposit (RD) account with the State Bank of India. The essentials are listed below:
- Completely and accurately filled application for an RD account
- Passport size photos
- Documents associated with KYC: for the individual as well as organisation (PAN Card/ Aadhar Card/ Voter Card/Driving Licence)
- In case of HUFs, KYC documents will incorporate HUF declaration deed, previous bank statement along with the PAN (self-attested) card
- In case of Partnership Firms, a few more documents including Incorporation Certificate, Deed of Partnership along with the identity proofs of the mandated signatories will be required.
You can open an SBI RD account if you belong to any of the following categories:
- Indian Residents
- NRIs/PIOs (Non-Resident Indians as well as Persons of Indian Origin)
- Organizations / Sole proprietorship and Partnership Ventures
- Public Ltd or Private Limited companies
How to Open an RD Account in SBI?
You can open an SBI RD account just by making an in-person visit to the nearest bank branch or online through the bank’s official website.
To open an offline account, one must correctly complete all the fields on the RD account opening form. They must submit the form along with a number of supporting documents, such as an Aadhaar card, a PAN card, photos, and business documentation, to name a few.
Follow the below-depicted step-by-step procedure to open an SBI RD account online:
- Visit the official website of the State Bank of India and log in using your credentials.
- Now open the ‘Request Tab,’ and click on the ‘e-fixed deposit’ option.
- Next, tap on the ‘e-RD/e-SBI Flexis Deposit link’ to open an RD account.
- Choose the tab named ‘e-RD’ and then click on ‘proceed’. If you have more than one SBI account, select the one from which you want to deduct the recurring deposit amount. Every month the amount will be deducted from the chosen account.
- Enter the mandatory details, including the monthly deposit amount and the deposit time frame.
- Finally, click the ‘Submit’ button, and your e-RD account will be successfully opened.
As soon as the chosen deposit time frame ends, the maturity amount is credited to the same savings account.
SBI Bank provides the option of RD for a hosted tenure. There are several tenure options available, ranging from one to ten years. The RD investment minimum is INR 100 per month, with subsequent payments of multiple 10. The maximum RD investment amount is unrestricted. Computing the interest amount and future value of the investment becomes an easy deal through the SBI RD calculator.
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Frequently Asked Questions (FAQs)
What is the highest interest earned on SBI recurring deposits?
The highest interest that you can earn on an SBI RD clocks at 5.4 per cent for a regular citizen when the chosen tenure is five to ten years. At the same time, SBI offers an RD interest rate of 6.2 per cent for a senior citizen. One of the most beneficial parts, in this case, is that you can compute the returns easily through the SBI Bank RD calculator.
Does SBI provide a Loan against RD?
Yes, SBI provides a loan against RD. 90% of the deposit fund is the maximum loan amount offered by SBI bank. You can use the recurring deposit or RD account as security for the loan. The interest rate on the loan is slightly higher contrary to the interest rate on the SBI Bank’s RD.
Do SBI provide a premature withdrawal facility for recurring deposits?
Yes, SBI offers a premature withdrawal facility to its RD account holders.