Sbi Recurring Account Calculator
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Reviewed by Calculator Editorial Team
SBI Recurring Account is a popular savings scheme offered by State Bank of India (SBI). It allows customers to deposit a fixed amount periodically (monthly, quarterly, or annually) and earn interest on the cumulative balance. This calculator helps you determine the maturity amount and interest earned based on your deposit details.
How SBI Recurring Account Works
An SBI Recurring Account is a type of fixed deposit where you make regular deposits (recurring payments) into your account. The bank calculates interest on the cumulative balance of all your deposits, not just the latest one. This means your interest grows over time as you add more deposits.
Key Features
- Regular deposits (monthly, quarterly, or annually)
- Interest calculated on the cumulative balance
- No withdrawal before maturity
- Compounding of interest
- Tax benefits under Section 80C of the Income Tax Act
Benefits
- Regular savings discipline
- Compound interest growth
- Tax benefits
- Flexible deposit periods
- Guaranteed returns
Important Note
The actual interest rate and terms may vary based on SBI's current policies. Always check with your bank for the most up-to-date information.
Formula Used
The maturity amount (A) of an SBI Recurring Account can be calculated using the following formula:
Recurring Deposit Formula
A = P × [ ( (1 + r/n)^(nt) - 1 ) / (r/n) ]
Where:
- P = Monthly installment amount
- r = Annual interest rate (in decimal)
- n = Number of times interest is compounded per year
- t = Time the money is invested for (in years)
For SBI Recurring Accounts, the interest is typically compounded monthly (n=12).
Interest Earned
The total interest earned is simply the maturity amount minus the total deposits made.
Worked Example
Let's calculate the maturity amount for an SBI Recurring Account with the following details:
| Monthly Deposit | ₹5,000 |
|---|---|
| Annual Interest Rate | 7.5% |
| Deposit Period | 5 years |
| Total Deposits | ₹300,000 (5 years × 12 months × ₹5,000) |
| Maturity Amount | ₹333,750.00 |
| Total Interest Earned | ₹33,750.00 |
In this example, by making monthly deposits of ₹5,000 for 5 years at an annual interest rate of 7.5%, you would receive a maturity amount of ₹333,750, earning ₹33,750 in interest.
Frequently Asked Questions
- What is the minimum deposit amount for an SBI Recurring Account?
- The minimum deposit amount for an SBI Recurring Account is typically ₹100 per month. However, this may vary based on current bank policies.
- Can I withdraw money from an SBI Recurring Account before maturity?
- No, you cannot withdraw money from an SBI Recurring Account before the maturity date. The account is locked for the entire deposit period.
- Is there any tax benefit on the interest earned from an SBI Recurring Account?
- Yes, the interest earned from an SBI Recurring Account is tax-free under Section 10(32) of the Income Tax Act.
- Can I change the deposit amount or frequency after opening the account?
- No, the deposit amount and frequency cannot be changed after opening the account. You must maintain the same regular deposits throughout the term.
- What happens if I miss a deposit in an SBI Recurring Account?
- If you miss a deposit, the account will be closed, and you will not receive any interest on the missed deposits. It's important to maintain regular deposits to avoid this.