SBI pays an 0.25 percentage point higher interest rate to senior citizens on amounts about Rs 10,000

State Bank of India (SBI) recently lowered its interest rates on fixed deposits (FDs) up to Rs 2 crore. SBI, the country's largest bank, currently provides interest rates to the tune of 5-6.5 per cent to the general public on fixed deposits up to Rs 2 crore. On amounts above Rs 10,000 in its fixed deposit account, SBI provides a 0.25 percentage point higher interest rate to senior citizen customers compared to the general public, according to the lender's corporate website - sbi.co.in. The interest is payable on a monthly or quarterly basis, depending on the option selected at the time of opening of account, according to SBI.

SBI provides the following interest rates on FDs up to Rs 2 crore with effect from August 1, 2019:

Maturity period Interest rate for general public Interest rate for senior citizens 7 days to 45 days 5% 5.50% 46 days to 179 days 5.75% 6.25% 180 days to 210 days 6.25% 6.75% 211 days to less than 1 year 6.25% 6.75% 1 year to less than 2 year 6.80% 7.30% 2 years to less than 3 years 6.70% 7.20% 3 years to less than 5 years 6.60% 7.10% 5 years and up to 10 years 6.50% 7% (Source: tin-nsdl.com)

Here are some other important things to know about the SBI fixed deposit (FD) account:

1. SBI fixed deposit accounts can be opened by entities such as individuals, partnership firms, private and public limited companies, Hindu Undivided Families (HUFs)/specified associations, societies and trusts.

2. The minimum investment limit is Rs 1,000. The account can be opened for a minimum of seven days up to a maximum maturity period of 10 years.

3. At the end of tenure, a premature withdrawal is allowed with penalty. For fixed deposits up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 per cent for all tenors. For fixed deposits above Rs 5 lakh but below Rs. 1 crore, a penalty of 1 per cent is applicable, according to SBI.

4. The interest is paid at the contracted rate irrespective of any change in the rates thereafter, SBI mentioned on its website.

5. The interest is subject to income tax. Exemptions are allowed under certain conditions as specified under the Income tax Act 1961, according to SBI.