Fixed Deposit Accounts: How SBI's Multi Option Account Differs From Regular Account
State Bank of India (SBI) offers a type of fixed deposit scheme, called Multi Option Deposit Scheme (MODS), under its personal banking portfolio. This SBI scheme is a type of fixed deposit (FD) account linked to the savings or current account. Unlike in normal fixed deposit accounts, which are fully liquidated, an MODS account holder can withdraw in multiples of Rs 1,000 as per his or her needs, according to SBI. The balance amount in the multi option deposit account continues to earn the fixed deposit rates applicable at the time of initial deposit.
Here are 10 key things to know about SBI's multi option fixed deposit account:
1. The minimum fixed deposit amount for the multi option deposit account is Rs 1,000. Any deposits above that are required to be in multiples of Rs. 1,000.
2. There is no upper limit on the amount that can be deposited in this type of fixed deposit (FD) account, according to SBI.
3. The minimum tenure for which this deposit can be opened is 1 year.
4. The maximum term - or maturity period - for SBI's multi option FD deposit account, unlike a regular fixed deposit (FD) account, is five years.
5. Tax can be deducted at source if the interest earned on the deposit is more than Rs 10,000 during the financial year, according to SBI.
6. SBI pays the same interest rate on a multi option fixed deposit account as a fixed deposit account. SBI revised its interest rates on retail fixed deposits with effect from August 30. The following FD interest rates are for deposits below Rs 1 crore:
| Term | Interest rate for general public w.e.f. 30.07.2018 | Interest rate for senior citizen w.e.f. 30.07.2018 |
|---|---|---|
| 1 year to less than 2 year | 6.7 | 7.2 |
| 2 years to less than 3 years | 6.75 | 7.25 |
| 3 years to less than 5 years | 6.8 | 7.3 |
7. Nomination facilities are available with the MODS account.
8. Premature withdrawal is allowed in SBI's multi option deposit account. All the rules of premature withdrawal of a normal fixed deposit (FD) account are applicable, according to SBI.
9. A loan facility is also available with the MODS account.
10. Further breaking of units when the lien is marked on a particular account is not allowed, according to the banking major.
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