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SBI FD Floating Scheme - Key Features and Comparison
Investing in Fixed Deposits (FDs) is a common choice for those seeking secure returns. In response to changing market conditions, the State Bank of India (SBI) has introduced both SBI FD fixed rates and floating rates. Among these, the SBI FD floating scheme stands out because it helps you with returns that go up and down with market trends and serves as a flexible alternative to fixed-rate FDs. This guide introduces the main features, rates, and working methods of each type of FD to assist you in making an informed decision.
Returns as high
as 7.1%*
Includes life cover
Completely Tax free+
as 7.1%*
Includes life cover
Completely Tax free+
Maximum returns Offered by
Guaranteed
Highest
7.1%*
Guaranteed Plan
(by insurance companies)
(10 Years)
6.5%**
Fixed Deposits
(by SBI bank)
(5-10 Years)
7.1%***
Public Provident Fund
(other popular options)
(15 Years)
Get Guaranteed returns up to 7.1%*
Fully Tax-Free* (unlike FD), Life Cover Included
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SBI FD Interest Rates
- SBI FD Floating Scheme - Key Features and Comparison
What is the SBI FD Floating Scheme?
The SBI FD Floating Scheme offers a dynamic interest rate that changes with time and is linked to the MCLR, which reflects the market scenario. The returns on this scheme vary with SBI FD interest rates, allowing earnings to be higher with rising interest rates, but with the risk of lower returns during economic downturns.
Information About
Guaranteed Return Plans
Returns Before Tax
7.1% (TAX-FREE)
Returns After Tax
7.1%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
*For annual premium upto ₹5 Lacs
Key Features of the SBI FD Floating Scheme
The SBI FD floating scheme offers several features that are designed to attract investors who seek flexibility and higher returns. These are the key features of the scheme:
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Market-linked Interest Rates:
The interest rate here is linked to SBI’s MCLR (Marginal Cost of Funds Based Lending Rate), which changes periodically, according to the market scenario.
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Periodic Adjustments:
Rates of interest are put under review and are then adjusted quarterly or half-yearly, with the possibility that your returns follow the trend of the prevailing economic situation.
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Flexible Tenure Options:
Just as with traditional fixed deposits, the floating FD scheme provides tenures ranging from 7 days to as long as 10 years, allowing an investor to select any time duration suitable to his or her needs.
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MCLR Benchmarking:
The returns depend upon the MCLR, which is revised from time to time by SBI as per changes in the market and economic conditions.
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Loan Against FD:
You can borrow against both fixed and floating FDs under SBI. As much as 95% of your FD amount can be taken as a loan at an attractive interest rate, thereby providing you with liquidity without breaking the FD.
FD interest rates India have fallen consistently over the last 12 years.
Overview of SBI FD Floating Scheme: Fixed vs. Floating Rates
SBI FDs offer two rate options: fixed and floating. Both maintain the same basic investment structure, but the difference lies in the calculation of interest.
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SBI Fixed Rate FD:
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Gives you a fixed return for the whole investment period.
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Interest rates are decided at the time of investment and never change.
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Best for risk-averse investors who wish for stable returns.
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SBI Floating Rate FD:
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The interest rate is linked to the market benchmark (usually the MCLR).
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Rates can change periodically, depending on market conditions.
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Can provide higher returns during times of rising interest rates, but also exposes you to the risk of lower returns if rates fall.
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Key Takeaway
There are many factors to consider when choosing between the Fixed and Floating FDs of SBI, such as financial goals and willingness to take risks. Fixed FDs promise lasting returns, which is good for risk-averse investors, while Floating FDs offer flexibility, with possibly higher returns depending on the fluctuations of the market. Both modes are secure and competitive, thereby giving you the privilege to choose at your convenience between SBI FD rates fixed and floating. Your choice should depend on whether you prefer certainty or the potential for growth with market fluctuations.
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FAQs
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What is SBI Floating Rate FD?
The account is an FD wherein the interest rate will be linked to MCLR, changing as per the market conditions. -
When could the interest rates on an SBI floating FD change?
According to changes in MCLR, there will be a quarterly/semi-annually review and change of the interest rates. -
Can I make an early withdrawal of an SBI Floating Rate FD?
Early withdrawal, with penalties applicable depending upon the tenure and amount, is permitted in the Floating Rate FD. -
Is the return guaranteed in an SBI Floating Rate FD?
The interest rates change with the market conditions, so the returns keep varying and do not remain stable. -
Would I be able to take a loan against the SBI floating FD?
Yes, you can avail of loans against the deposit of an amount of up to 95 per cent of the FD value, thus providing a further liquidity option without having to unwind.
*All savings are provided by the insurer as per the IRDAI approved
insurance plan. Standard T&C Apply
+ Trad plans with a premium above 5 lakhs would be taxed as per
applicable tax slabs post 31st march 2023
#Discount offered by insurance company
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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