SBI reinvestment plan is subject to a tax deducted at source (TDS).

State Bank of India or SBI offers a variety of savings instruments from fixed deposit (FD) accounts, to mutual funds (MFs). One such product offered by SBI is the reinvestment plan, which works like a fixed deposit (FD). However, in case of a reinvestment plan, interest is given at the time of maturity. In this scheme, the interest earned on a deposit is added into the principal and reinvested, according to SBI's website, sbi.co.in. On the other hand, in case of a fixed deposit (FD), Interest is paid out at a regular frequency during the period of deposit. (Also read: Looking To Invest In SBI Deposit Schemes? These Are The Returns You Get)

Given below are key things you need to know about SBI's reinvestment plan:

SBI FD Investment Limits

Customers willing to invest in reinvestment scheme are required to pay a minimum of Rs 1,000. There is no maximum limit for deposits under SBI's reinvestment plan, according to SBI.

(Also read: Key Things To Know About SBI's Multi Option Deposit Account)

SBI FD Tenure

The minimum tenure for SBI's reinvestment plan is six months and the maximum is 10 years.

SBI FD Interest Rates

The interest rate is same as applicable to SBI's fixed deposits with quarterly compounding. The following FD interest rates are applicable on deposits below Rs 2 crore, according to the bank's website:

Period General public (% p.a.) Senior citizens (% p.a.) 180 days to 210 days 6.35 6.85 211 days to less than 1 year 6.4 6.9 1 year to less than 2 year 7 7.5 2 years to less than 3 years 6.75 7.25 3 years to less than 5 years 6.7 7.2 5 years and up to 10 years 6.6 7.1

(As mentioned on SBI's website)

SBI FD Tax Deducted At Source

SBI reinvestment plan is subject to a tax deducted at source (TDS). TDS is deducted at the prevalent income tax rate if form 15G/15H not submitted.

SBI FD Premature Withdrawal Rule

The facility of premature withdrawal is available. For fixed deposit (FD) up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 per cent. For fixed deposits above Rs 5 lakh but below Rs 1 crore, applicable penalty is 1 per cent. The interest is 0.50 per cent or 1 per cent below the interest rate applicable at the time of deposits for the period deposit remained with the bank or 0.50 per cent or 1 per cent below the contracted rate, whichever is lower. However, no interest is paid on deposits which remain for a period of less than seven days, according to SBI.