SBI Amrit Kalash vs Amrit Vrishti: Learn all about special SBI term deposits; see how Rs 10,000-Rs 2 crore investments grow over time
SBI Special FD Schemes: Did you know that the country's largest lender, State Bank of India (SBI), offers a variety of special fixed deposit investment schemes - also known as term deposits? Investing in fixed deposits is considered safer compared to equity or equity-related instruments as they offer returns at a fixed, predetermined rate of interest that is higher than savings accounts. The interest rate offered at the time of opening a fixed deposit remains constant throughout the term of the deposit.
SBI Special FD Schemes: SBI Special FD Schemes: Did you know that State Bank of India (SBI) offers a variety of special fixed deposit investment schemes - also known as term deposits? SBI - the country's largest bank - offers certain special FD schemes that come with different maturity options and offer higher interest rates. Investing in fixed deposits is generally considered safer than investing in equities or equity-related instruments. This is because fixed deposits provide returns at a fixed, predetermined interest rate that is typically higher than that of savings accounts. Once you open a fixed deposit, the interest rate stays constant for the entire duration of the deposit. In other words, the interest rate offered at the time of opening a fixed deposit remains constant throughout the term of the deposit. This article compares four types of special FD schemes offered by the PSU bank: SBI Sarvottam, SBI Amrit Kalash, SBI WeCare, and SBI Amrit Vrishti.
Special FD Schemes | SBI WeCare term deposit for senior citizens
SBI's WeCare term deposit is a special fixed deposit scheme specially crafted for senior citizens that comes with a maturity period of five and 10 years. What makes this FD special? Meant only for senior citizen depositors, the WeCare FD scheme offers a return of 100 bps above the card rate for the general public in the same maturity option.
Special FD Schemes | SBI WeCare term deposit for senior citizens
Confused? With effect from June 15, 2024, SBI offers a return of 7.5 per cent per annum on retail domestic term deposits up to Rs 3 crore to senior citizen depositors under the WeCare scheme. This return is a full percentage point (100 basis points) higher than 6.5 per cent, the interest rate applicable to other depositors.
Special FD Schemes | SBI Amrit Vrishti term deposit
Available for a limited period, until the end of FY25, this special retail FD scheme offers an interest rate of 7.25 per cent per annum to the general public and an additional 50 bps premium (7.75 per cent) to senior citizen depositors on deposits made for a lock-in period of 444 days.
Special FD Schemes | SBI Amrit Vrishti term deposit
Available on domestic retail term deposits, including NRI rupee term deposits, up to Rs 3 crore, the SBI Amrit Vrishti scheme is applicable to new as well as renewed deposits.
Special FD Schemes | SBI Amrit Kalash fixed deposit
This special scheme offered by SBI comes with a maturity period of 400 days, offering an interest rate of 7.1 per cent to the general public and 7.6 per cent to senior citizens.
Valid till September 30, 2024, the Amrit Kalash scheme applies to new and renewed domestic retail term deposits, including NRI rupee term deposits, up to Rs 2 crore.
Special FD Schemes | SBI Sarvottam (non-callable) domestic retail term deposit scheme
Available on one-year and two-year domestic retail deposits above Rs 1 crore and up to Rs 2 crore, this special FD offers annual returns to the tune of 7.1-7.9 per cent to depositors.
In the one-year option, the lender offers interest rates of 7.1 per cent and 7.6 per cent to the general public and senior citizens with effect from May 15, 2024. In the two-year option, the interest rates at 7.4 per cent and 7.9 per cent respectively.
Know Your Fixed Deposit | What are non-callable FDs?
A non-callable deposit doesn't allow premature withdrawal, which means that once set up, such deposits cannot be liquidated before the completion of the full term.
Special FD Schemes | SBI Sarvottam (non-callable) domestic bulk deposit scheme
SBI Sarvottam scheme is also available for bulk deposits, which means deposits of Rs 2 crore and above.
In the one-year option, the deposit offers interest of 7.3 per cent to the general public and 7.8 per cent to senior citizens. In the two-year option, the interest rates are 7.4 per cent and 7.9 per cent, respectively.
Know Your Fixed Deposit | How does compounding work in fixed deposits?
Simply put, quarterly compounding means the interest is calculated - and added to the corpus - every three months.
When interest is compounded quarterly, it means that the interest is added to the principal four times a year, rather than just once.
Instead of computing interest once annually, quarterly compounding divides the annual interest rate by four. For instance, if the annual interest rate is 8.0 per cent, the quarterly interest rate would be 2.0 per cent (8.0 per cent divided by four).
Learn Everything About Your Fixed Deposit | How does money grow in these special FD schemes?
Now, let's take a few examples to better understand how these FD schemes work, based on the current interest rates.
A Rs 10,000 deposit (principal) in the SBI WeCare scheme yields interest of about Rs 11,023 to senior citizen depositors over the maximum maturity period of 10 years, therefore turning into a corpus of Rs 21,023 (principal PLUS interest) based on quarterly compounding.
Similarly, a deposit of Rs 50,000 becomes Rs 1,05,117 over the 10-year period.
Special FD Schemes | How SBI Amrit Vrishti scheme works
Over the maturity period of 444 days, a deposit of Rs 1 lakh made by a senior citizen customer will become Rs 1,09,787 (Rs 9,787 interest).
Special FD Schemes | How SBI Amrit Kalash scheme works
Similarly, a deposit of Rs 1 crore in the scheme will become Rs 1,08,60,055 (Rs 8,60,055 interest) for senior citizens in the scheme over the maturity period of 400 days.
Special FD Schemes | SBI Sarvottam scheme for bulk deposits
This special scheme turns a bulk deposit of Rs 2 crore into Rs 2,33,87,280 (Rs 33,87,279 interest) for senior citizen depositors in the two-year option.
Please note that the above examples are for illustrative purposes only and are based on current interest rates.
Learn Everything About FDs | How does a fixed deposit work?
A fixed deposit, also known as a term deposit, is a fixed- and guaranteed-income scheme that enables the depositor to earn a predetermined amount of money (in the form of interest) against an investment over a predetermined span of time.
Learn Everything About FDs | How does a fixed deposit work?
Banks pay interest to compensate for the use of the depositors' money.
The funds deposited by customers become part of the bank's pool of money that it can lend to other customers or invest in various financial products.
Learn Everything About FDs | When is the interest rate decided?
The interest rate is fixed when the customer makes the deposit and depends on the length of the term.
The longer the investment period, the higher the interest rate.
Learn Everything About FDs | Do fixed deposit interest rates change over time?
Yes, commercial banks review and revise their interest rates from time to time.
Learn Everything About Your Fixed Deposit | Do repo rate changes impact FD rate?
No, interest rate changes do not apply to existing FDs, but impact a fresh deposit or a renewed FD.
How it works is that the interest rate agreed upon at the time of deposit remains constant throughout the term of the deposit. It is the 'guaranteed' return promised by the financial institution at the time of the deposit.
This essentially means that even if interest rates in the market change, your FD will continue to earn interest at the rate promised to you when you made the deposit.
So, existing FDs are unaffected by market rate fluctuations.