Earn 7.25% interest on your savings with SBI's new FD
What's the story
The State Bank of India (SBI) has introduced a new term deposit scheme, Amrit Vrishti, with an attractive annual interest rate of 7.25%.
Senior citizens stand to benefit more from this scheme as they will receive an extra 0.50% interest.
The scheme, which began on July 15, is open for deposits for a period of 444 days.
Both domestic and non-resident Indian customers can invest in the scheme until March 31, 2025.
Scheme details
Amrit Vrishti scheme: Features and accessibility
Amrit Vrishti is designed with a customer-centric approach, offering competitive interest rates and multiple convenient channels for availing the scheme.
Customers can access the scheme through SBI branches, YONO SBI, YONO Lite (mobile banking apps), and SBI internet banking (INB), accommodating both online and offline transactions.
The Amrit Vrishti scheme, however, limits the investment period to just 444 days (roughly 15 months), without provisions for renewing your investments at the same interest rate.
Expert opinion
Expert analysis on Amrit Vrishti's investment potential
Hiren Thakkar, Chartered Accountant Proprietor at Hiren S Thakkar & Associates, highlighted the potential limitations of the scheme.
He explained, "With a pre-tax internal rate of return at 7.80%, and a post-tax return of 7.75%, an initial investment of ₹1,00,000 will generate ₹9,787 over 444 days."
Thakkar added that "a shorter investment horizon limits the opportunity for compounding to maximize growth."
Target demographic
Amrit Vrishti: Ideal for short-term goals and senior citizens
Despite its attractive interest rate, the Amrit Vrishti scheme may not be optimal for fully leveraging the potential of compounding for long-term financial goals.
It is primarily suitable for individuals with short-term goals or senior citizens aiming to earn a reasonable interest income on their retirement savings.
For those seeking long-term growth, other investment options such as mutual funds may be more suitable.