The SBI 36-Month Fixed Deposit Scheme is the State Bank of India’s most favored medium-term investment option. Although this deposit scheme is often termed “a new scheme,” it is simply an already existing 3-year fixed deposit tenure, which happens to be very popular among SBI’s fixed deposit offerings. Three-year duration is preferred as it strikes a good balance between offering higher returns than short-term deposits and shorter lock-in period than long-term FDs. For very risk-averse customers, the 36-month FD still is a trusted alternative.
Interest Rate And Potential Returns
SBI is now providing principal and interest at an effective rate of 6.45% for the 2-3 year term deposits. The general customers are applicable to the given rate while the retired persons may get higher rates. To illustrate, if one invests ₹2,00,000 in a 36-month FD paying 6.45% per annum compounded quarterly, he/she will receive approximately ₹2.40 lakh at the end of three years with nearly ₹40,000 being the interest for that period. Since the interest is compounded, the more returns are when investors reinvest the interest instead of choosing periodic payouts. Thus, the 36-month FD is a perfect option for risk-averse investors looking for safe and steady returns.
Rules On Withdrawals and Penalties
Customers must become familiar with SBI’s early withdrawal rules before making an investment. When an FD is cashed out prior to the completion of the 36-month term, the bank will charge a penalty on the interest rate that is applicable. Generally, the charge is 0.50% for amounts below ₹5 lakh and 1% for amounts above ₹5 lakh. This will cut down the interest on the FD, which makes the condition of withdrawal in advance quite unprofitable. Hence the scheme is suitable only for those who can leave their funds locked in for the whole term.
Who Should Consider This FD?
The 36-month SBI FD is a product designed for the conservative investor’s profile, senior citizens, or those who want safe and guaranteed returns with no exposure to market risks. Further, it can be a perfect option for the savers planning their medium-term financial goals like education, marriage or anything within 3 years. Thanks to the stability of the investment, it will also work for those who want to keep their capital intact while receiving low returns.
Key Points To Remember Before Investing
Clients should always confirm SBIs most recent interest rate updates before they start the FD, as the rates can be changed from time to time. The investors need to determine which of the two options for interest payout, cumulative, or non-cumulative, suites their financial conditions the best. An emergency fund should be maintained to prevent the breaking of the FD before its maturity date. Besides, graphs comparing the returns of different tenures can be a good way of finding the investor’s financial objective-based option.
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