State Bank Of India (SBI) Recurring Deposit Vs SBI Flexi Deposit

State Bank of India (SBI) offers investors the option of investing their money in recurring deposits (RD) and flexi deposit accounts. Recurring deposits (RD) require customers to pay regular monthly installments for a specific interest rate until a given maturity date. On the other hand, SBI Flexi Deposit account offers flexibility in choosing the deposit amount within the minimum and maximum limits per financial year. The minimum deposit amount for SBI's flexi deposits is Rs. 5,000 per financial year and deposits can be made anytime during a month and any number of times, according to SBI's website, onlinesbi.com.


Here are the major differences between SBI's recurring deposits and SBI's Flexi deposits:


Interest rates:


SBI's interest rates on recurring deposits: 

                                                                                                                                                                                                                                                                                                                                   

Tenure	General public	Senior citizens
1 year	6.25% pa	6.75% pa
2 year  -less than 3 years	6% pa	6.50% pa
3 year - less than 5 years	6% pa	6.50% pa
5 year-up to 10 years	6% pa	6.50% pa

SBI's interest rates on Flexi Deposits Interest rate on SBI's flexi deposits are as applicable to term or fixed deposits, said SBI. Interest will be compounded at quarterly intervals, based on the balance outstanding on the last date of each month. Table:  Interest rates for Retail Domestic Term Deposits 'Below Rupees One Crore' (All figures in % per annum)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Tenors	Revised For Public w.e.f. 01.11.2017	Revised for Senior Citizens w.e.f. 01.11.2017
7 days to 45 days	5.25	5.75
46 days to 179 days	6.25	6.75
180 days to 210 days	6.25	6.75
211 days to less than 1 year	6.25	6.75
1 year	6.25	6.75
Above 1 year to 455 days	6.25	6.75
456 days to less than 2 years	6.25	6.75
2 years to less than 3 years	6	6.5
3 years to less than 5 years	6	6.5
5 years and up to 10 years	6	6.5

The minimum amount of monthly installment shall for a recurring deposit at SBI is Rs 100 while that for its flexi deposits, it is Rs. 5,000 per financial year.

The amount of installment and the number of installment cannot be changed after opening of an RD, said SBI. However, in case of SBI's flexi deposits, deposits can be made anytime during a month and any number of times.

Penalty on default in payment

Penalty on default in payment on SBI's recurring deposits 

Whenever a depositor fails to pay the installment on due date for three consecutive months the RD account shall not be closed and service charge of Rs 10 is applicable, said SBI. The penalty charged on delayed payment of instalment shall be i) Penalty in case of delay in payment of installment of RD of 5 years or less shall be Rs 1.50 for every Rs 100 per month. ii) Such penalty shall be Rs 2.00 for every Rs. 100 per month for the account on more than five years.

Penalty on default in payment on SBI's flexi deposits

Comments

Penalty for default in payment of minimum deposit will be Rs. 50/- per financial year, said SBI.