SBI fixed deposit rates change based on how long you lock your money away
State Bank of India (SBI) fixed deposits pay interest that depends on three things: how much you deposit, how long you keep it there, and whether you're a regular customer or over 60. SBI publishes its rates publicly, but they shift every few weeks in response to what the Reserve Bank of India does with its own rates. There is no single "SBI rate" — you need to check the current schedule for the term length you want.
SBI offers fixed deposits in periods ranging from 7 days to 10 years. Shorter terms (7 days to 45 days) pay less interest than medium terms (3 months to 2 years), and very long terms (5 to 10 years) sit somewhere in between. The bank also pays slightly higher rates to customers aged 60 and over, usually 0.5 percentage points more than the standard rate for the same term.
Interest can be paid to you monthly, quarterly, half-yearly, or at maturity — you choose when you open the account. If you need the money before maturity, SBI will let you withdraw it early, but you'll lose some interest and may pay a penalty depending on how early you withdraw.
Key Takeaways
- SBI fixed deposit rates vary by deposit amount and term length, with rates updated regularly on the SBI website and at branches.
- Senior citizens (age 60+) receive higher rates than other depositors, typically 0.5 percentage points above the standard rate.
- You can choose when interest is paid — monthly, quarterly, half-yearly, or at maturity — when you open the account.
- Early withdrawal before maturity results in a lower interest rate or penalty, so check SBI's current early withdrawal terms before depositing.
- Interest earned on fixed deposits is taxable income and must be reported on your tax return in the year it is credited to your account.
How deposit amount affects your interest rate
SBI offers different rates depending on how much you deposit. Deposits under 2 lakhs (₹200,000) get one rate, deposits from 2 lakhs to 5 lakhs get a slightly higher rate, and deposits above 5 lakhs get the highest rate. The difference is usually small — often 0.25 to 0.5 percentage points — but it adds up over time on larger sums.
Some deposit amounts also may have access to for special rates. For example, SBI occasionally offers higher rates for deposits of exactly 1 crore (₹10,000,000) or more, or for deposits made during specific promotional periods. Check the current rate card at your nearest SBI branch or on the SBI website to see whether your deposit amount qualifies for a higher tier.
Term length and how it changes what you earn
The longer you commit your money, the more interest SBI pays — but not always in a straight line. A 1-year deposit might pay 6.5%, a 2-year deposit 6.75%, and a 3-year deposit 7.0%, but a 5-year deposit might pay only 6.9%. This happens because SBI's rates follow what the Reserve Bank of India signals about future interest rates in the economy.
Very short terms (7 to 45 days) pay the least — often 3% to 4%. Medium terms (3 months to 2 years) pay more, usually 6% to 7%. Long terms (5 to 10 years) fall somewhere in the middle. Before you decide on a term, look at the full rate card for all options, because sometimes a 2-year deposit pays nearly as much as a 5-year one, and you get your money back sooner.
Senior citizen rates and who qualifies
If you are 60 years old or older, SBI pays you an extra 0.5 percentage points on top of the standard rate for any term length. This applies whether you are a new customer or have banked with SBI for years. You will need to provide proof of age — usually a passport, driver's license, or birth certificate — when you open the account.
The senior citizen rate applies to the account holder only. If you are opening a joint account with someone under 60, the account gets the standard rate, not the senior rate. Some SBI branches also offer special schemes for senior citizens that include higher rates for specific term lengths or additional features like monthly interest payouts.
How interest is paid and when you receive it
When you open a fixed deposit, you choose how often you want interest credited: monthly, quarterly, half-yearly, or at maturity. Monthly and quarterly payouts are useful if you want regular income, but the interest you receive each time is smaller. If you choose maturity, all interest is paid in one lump sum when the deposit matures.
Interest is credited to your SBI savings account or current account — whichever you link to the fixed deposit. If you choose monthly or quarterly payouts, the interest arrives on a set schedule. If you choose maturity payout, the interest and your original deposit both arrive on the maturity date. You can also choose to reinvest the interest by having it added back to the deposit, which earns you interest on interest (compound interest).
Early withdrawal and what it costs you
SBI allows you to withdraw your fixed deposit before maturity, but the interest rate you receive drops significantly. The penalty depends on how early you withdraw. If you withdraw within 7 days of opening the account, you get no interest at all. If you withdraw after 7 days but before maturity, SBI pays you a rate that is 1 to 1.5 percentage points lower than the rate you were promised.
For example, if you opened a 1-year deposit at 6.5% but withdrew it after 6 months, you might receive interest at only 5.0% or 5.5% instead. The exact penalty rate depends on the term length of your original deposit and SBI's current policy. Before you deposit money, ask your branch what the early withdrawal rate would be for your specific term, so you know the cost if you need the money sooner.
Tax on fixed deposit interest
Interest earned on SBI fixed deposits is taxable income. The amount of tax you owe depends on your total income and your tax bracket. If your total income (including the fixed deposit interest) exceeds the threshold for your age group, you must file an income tax return and report the interest.
SBI will send you a certificate showing how much interest you earned in the financial year (April to March). You can use this to file your tax return. If you expect to earn more than ₹40,000 in interest during the year, you may want to ask SBI to deduct tax at source (TDS) when the interest is paid, so you do not owe a large amount when you file your return. TDS is optional, but it can make tax filing simpler.
Frequently Asked Questions
Where do I find SBI's current fixed deposit rates?
SBI publishes its rate card on its official website under the deposits section, and you can also see current rates at any SBI branch. Rates change every few weeks, so check the website or call your branch before you deposit money to confirm the rate for your chosen term and deposit amount.
Can I break my fixed deposit if I need the money urgently?
Yes, SBI allows early withdrawal, but you will receive a lower interest rate — typically 1 to 1.5 percentage points below your original rate. The exact penalty depends on how long you held the deposit and your original term length. Ask your branch for the early withdrawal rate before you open the account.
Do I have to pay tax on fixed deposit interest?
Yes, fixed deposit interest is taxable income. You must report it on your income tax return if your total income exceeds the threshold for your age group. SBI can deduct tax at source (TDS) when interest is paid if you request it, which simplifies your tax filing later.
What happens to my fixed deposit when it matures?
When your deposit matures, SBI credits the original amount plus all interest to your linked savings or current account. You can then withdraw the money, or you can ask SBI to open a new fixed deposit with the matured amount. If you do nothing, the money sits in your savings account and earns only the savings account interest rate.
Are there any charges for opening or holding an SBI fixed deposit?
SBI does not charge a fee to open or hold a fixed deposit. However, if you request a physical deposit certificate or ask for early withdrawal, some branches may charge a small fee. Ask your branch about any charges before you open the account.