How a ₹1 Lakh SBI Fixed Deposit Grows Over 5 Years

What is an SBI Fixed Deposit?

An SBI Fixed Deposit grows through quarterly compounding, where the interest earned each quarter is added back to your principal balance. In the following quarter, you earn interest on both your original deposit and the accumulated returns.

For instance, under current SBI FD interest rates, depositing ₹1,00,000 for 1 year at 6.25% p.a. gives you more than a basic 6.25% payout. Instead, the bank calculates your balance four times a year (every 3 months), effectively yielding an annual return higher than the nominal rate. Upon maturity, SBI returns your complete initial principal along with all accumulated compound interest.

The Math Behind the Growth

To see exactly how your money grows, the SBI FD Calculator 2026 uses the compound interest formula:

Calculation:

A = 1,00,000 × (1 + 0.0605/4)^(4 × 5)

= 1,00,000 × (1 + 0.015125)^20

= 1,00,000 × (1.015125)^20

= ₹1,35,018

Interest Earned = ₹1,35,018 − ₹1,00,000 = ₹35,018

SBI FD Interest Rates Below 3 Crore

The highest SBI FD rates go up to 6.45% p.a. for general citizens on 444 days tenure and up to 7.05% p.a. for senior citizens on 5 years and up to 10 years tenure, effective from 15th December 2026 (last verified in October 2026):

*SBI FD Interest Rates as of 15th December 2026

Features and Benefits of SBI Fixed Deposit Scheme

SBI Fixed Deposits offer guaranteed returns and a wide range of deposit options to suit varying investment needs. Some of the key features and benefits include:

• Guaranteed Returns: Earn a fixed interest rate for the chosen tenure, which is not affected by market fluctuations.
• Additional Interest for Senior Citizens: SBI senior citizen FD interest rates are greater than those for normal depositors for the same tenure, and eligible senior individuals can avail of them.
• Flexible Interest Payment Options: Depending on the SBI FD scheme selected, interest may be paid monthly, quarterly, half-yearly, annually, or on maturity.
• Premature Withdrawal Facility: Most of the normal SBI Fixed Deposits can be closed prematurely, subject to the bank’s applicable terms and penalty. Before prematurely shutting your deposit, check the rules for SBI FD premature withdrawal.
• Tax-Saver FD Scheme: Interest earned on fixed deposits is taxable under both the old and new tax regimes and is taxed as per your applicable income tax slab. Under the old tax regime, eligible 5-year Tax Saver Fixed Deposits qualify for a tax deduction of up to ₹1.5 lakh under the corresponding provision of the Income-tax Act, 2025, Section 123 (earlier Section 80C). This deduction is not available under the new tax regime.
• Loan/Overdraft Against FD: All eligible depositors can avail an SBI loan against FD or overdraft facility without prematurely terminating their fixed deposit, subject to the terms and conditions of the Bank.

SBI Fixed Deposits offer guaranteed returns and a wide range of deposit options to suit varying investment needs. Key features and benefits include:

• Guaranteed Returns: Lock in a fixed interest rate for your chosen tenure (7 days to 10 years), unaffected by market fluctuations.
• Higher Rates for Senior Citizens: SBI senior citizen FD interest rates offer an additional interest rate benefit (typically 0.50% p.a. higher than standard card rates) across eligible tenures.
• Flexible Interest Payouts: Choose between monthly, quarterly, half-yearly, or annual interest payouts, or opt for a cumulative payout at maturity.
• Premature Withdrawal Facility: Rules for SBI FD premature withdrawal allow most regular fixed deposits to be closed before maturity, subject to a penalty of 0.50% to 1.00% depending on the principal amount.
• Tax-Saver FD Scheme: SBI tax saver fixed deposits qualify for an upfront tax deduction of up to ₹1.5 lakh under Section 123 of the Income-tax Act, 1961 (Old Tax Regime only). Interest earned on all FDs is taxable according to your applicable income tax slab under both tax regimes.
• Loan / Overdraft Against FD: Avail an instant SBI loan against FD or overdraft up to 90% of your deposit value without breaking your regular FD.

Eligibility Criteria for SBI Fixed Deposit

The following individuals and groups are eligible to apply for an SBI fixed deposit:

How to Apply for an SBI Fixed Deposit?

You can apply for an SBI FD to avail the best FD interest rates by following either the online process or the offline process.

Online Process

Open an SBI Fixed Deposit online through NetBanking or the YONO app by following these steps:

• Log In: Sign in to SBI NetBanking or the YONO app.
• Open FD Section: Select Fixed Deposit or Term Deposit.
• Enter Amount: Select your account and enter the deposit amount (minimum ₹1,000).
• Select FD Type: Select either cumulative or non-cumulative FD.
• Confirm Details: Check the information and proceed with the request.
• Get Receipt: Download or print the e-TDR as confirmation.

Offline Process

You can also open an SBI Fixed Deposit by visiting the nearest branch of SBI and following the steps:

• Visit the Branch: Go to the nearest SBI branch with PAN/Aadhaar.
• Fill Form: Fill in the Term Deposit (FD) application form.
• Submit KYC: Provide the required identity and address documents.
• Deposit Amount: Invest the FD amount (minimum ₹1,000).
• Select Tenure: Select tenure and interest payout option.
• Receive Receipt: Get the Term Deposit Receipt (TDR).

Documents Required for an SBI FD 2026

Documents required to open an SBI Fixed Deposit depend on whether you are an existing SBI customer or a new customer. All existing customers with updated KYC records may not need to submit documents again.

Note: All SBI customers who already have KYC-compliant savings or current accounts can normally open an FD without having to resubmit KYC documents unless the bank asks for fresh information.

Key Takeaways

SBI Fixed Deposits deliver risk-free returns with tenures ranging from 7 days to 10 years. Booking a ₹1 lakh 5-year FD at 6.05% p.a. yields returns around ₹1.35 lakh at maturity with quarterly compounding. Eligible investors can unlock higher interest rates for senior citizens along with convenient features like overdraft facilities and premature withdrawal options.