Investing in a fixed deposit (FD) in the State Bank of India (SBI) is a safe and reliable way to grow your money. Many people prefer SBI due to its trustworthiness and attractive interest rates. But how much return will you get after 1 year on a ₹1 lakh FD? Let’s break it down with clear numbers and insights.
Big Profit on FD of Rs 1 Lakh in SBI
| Aspect | Details |
|---|---|
| Bank | State Bank of India (SBI) |
| Deposit Amount | ₹1,00,000 |
| Tenure | 1 Year |
| Interest Rate (General Public) | 6.80% p.a. |
| Interest Rate (Senior Citizens) | 7.30% p.a. |
| Maturity Amount (General Public) | ₹1,06,988 |
| Maturity Amount (Senior Citizens) | ₹1,07,524 |
| Tax Deduction (If applicable) | TDS applies above ₹40,000 (₹50,000 for seniors) |
An SBI fixed Deposit of ₹1 lakh for 1 year can fetch you up to ₹7,524 in returns if you are a senior citizen and ₹6,988 for general investors. SBI’s reliability, competitive interest rates, and safety make it a preferred choice for risk-free investment. If you’re looking for a secure way to grow your money, an SBI FD is a smart choice.
Understanding SBI fixed Deposit Interest Calculation
The interest on SBI fixed deposits is compounded quarterly, meaning your money grows faster than simple interest calculations.
Formula for Compound Interest
A = P (1 + r/n)^(nt)
- A = Maturity Amount
- P = Principal Amount (₹1,00,000)
- r = Annual Interest Rate (0.068 for general public, 0.073 for seniors)
- n = Number of times interest is compounded in a year (4 for quarterly)
- t = Time in years (1 year)
Using this formula:
- For general public: ₹1,06,988 (₹6,988 interest earned)
- For senior citizens: ₹1,07,524 (₹7,524 interest earned)
see also: Post Office KVP Scheme Now money will be doubled in government bank
Advantages of SBI Fixed Deposits
- Guaranteed Returns: Unlike market-linked investments, FDs offer assured returns.
- Flexible Tenure: SBI offers FDs from 7 days to 10 years.
- Loan Against FD: You can avail a loan of up to 90% of your FD value.
- Auto-Renewal Facility: Ensures continuous growth of your deposit.
- Tax Benefits: Certain 5-year FDs qualify for tax deductions under Section 80C.
see also: Best Fixed Deposit Interest Rates for Senior Citizens in 2025
Tax Implications on SBI FD Returns
Interest earned on FDs is taxable under ‘Income from Other Sources’. If the total interest in a financial year exceeds ₹40,000 (₹50,000 for senior citizens), TDS (Tax Deducted at Source) of 10% is applicable.
To avoid TDS, individuals with income below the taxable limit can submit Form 15G (for non-seniors) and Form 15H (for seniors).
FD of Rs 1 Lakh in SBI FAQs
1. Can I withdraw my fixed Deposit before 1 year?
Yes, but SBI may levy a premature withdrawal penalty, usually 0.50% to 1% lower than the applicable interest rate.
2. Is there a difference in FD rates for different tenure options?
Yes, longer tenure FDs generally offer higher interest rates. SBI provides special rates for certain periods.
3. How can I open an SBI FD?
You can open an FD through SBI Net Banking, the YONO app, or by visiting an SBI branch.
4. Is SBI FD better than investing in mutual funds?
SBI FD offers fixed returns with no risk, while mutual funds have higher returns but come with market risks.
