SBI Compound Interest Calculator

Key India terms (used throughout this page)

Fixed Deposit (FD)

Lump-sum deposit, fixed tenure, fixed rate. SBI compounds quarterly. TDS at 10% above ₹40K/yr interest (₹50K for seniors).

Recurring Deposit (RD)

Fixed monthly deposit, FD-like rates, quarterly compounding. Useful for forced savings; interest fully taxable.

PPF

Public Provident Fund. 7.1% annual, 15-yr lock-in, ₹1.5L cap, 80C deduction + tax-free interest. Best long-horizon debt instrument.

SIP (Systematic Investment Plan)

Fixed monthly investment into equity / debt mutual fund. Not a fixed return — modelled at 10–12% long-term for equity.

SBI Fixed Deposit: quarterly compounding

SBI Fixed Deposits compound quarterly. For ₹1,00,000 invested at the typical 6.5% SBI FD rate over 5 years: maturity value is ₹1,38,042. Interest earned: ₹38,042. The formula: A = P × (1 + r/4)^4×t. Senior citizens get an additional 0.5% across most tenures, taking the same FD to about ₹1,42,576.

SBI Recurring Deposit (RD): monthly contribution math

An SBI RD lets you deposit a fixed amount each month and earns FD-like rates. For ₹5,000/month at 6.5% over 5 years (60 months), maturity value is approximately ₹3,55,200, of which ₹3,00,000 is principal and ₹55,200 is interest. The RD interest is taxable; choose Tax-Saver FD if you need a 5-year lock-in with 80C deduction (₹1.5 lakh limit).

PPF: the tax-free compound machine

The Public Provident Fund currently pays 7.1% compounded annually. Maximum contribution is ₹1,50,000/year, lock-in 15 years (extendable in 5-year blocks). Investing the max for 15 years compounds to approximately ₹40,68,000, of which ₹18,18,000 is interest — all tax-free. PPF beats FD for any taxpayer in the 20%+ tax slab on a 15-year horizon.

SBI savings account: simple math

SBI Regular Savings Account currently pays 2.7% per annum, compounded quarterly. On a ₹5,00,000 balance, this earns about ₹13,500/year — barely above inflation. Move emergency funds beyond 1 month of expenses to a high-yield FD or liquid mutual fund.

FD vs equity mutual fund SIP (long term)

Over a 20-year horizon, the comparison gets stark:

• SBI FD at 6.5% (quarterly): ₹5,000/month grows to approximately ₹24,80,000
• PPF at 7.1% (annual, max contribution): ₹1,50,000/year grows to approximately ₹65,58,000
• Equity Mutual Fund SIP at 12% (monthly): ₹5,000/month grows to approximately ₹49,00,000

FDs are zero-volatility but inflation-vulnerable. Equity SIPs swing ±30% in any given year but historically beat FD by 4–6 percentage points over 10+ year periods in India.

Tax implications

SBI FD interest is fully taxable as per income slab. TDS of 10% kicks in when interest exceeds ₹40,000/year (₹50,000 for senior citizens). PPF interest is fully tax-free. ELSS mutual funds offer 80C deduction with 3-year lock-in — often the best tax-adjusted return option for the salaried.

How to use this calculator

For SBI FD: set compounding to quarterly (4 per year), enter the FD rate (currently 6.0–7.0% for typical tenures), tenure in years, leave monthly contribution at 0. For RD: set compounding to monthly (12), enter the rate, tenure, and your monthly deposit. For PPF: set compounding to annual (1), rate to 7.1%, tenure to 15+ years, monthly contribution as ₹12,500 (the ₹1.5L annual max divided by 12). Currency is pre-set to INR.

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Methodology & sources

• SBI FD / RD rates: SBI official rate card (sbi.co.in)
• PPF rate & rules: Department of Posts / Ministry of Finance quarterly small-savings notification
• Mutual fund long-run return: AMFI & SEBI historical category averages
• Tax rules (TDS, 80C, LTCG): Income Tax Act of India, current AY

Related

• Compound interest calculator (USD primary)
• Compound investment calculator (multi-currency, flexible)
• Monthly compound interest calculator — for SIP / mutual fund modelling
• Daily compound interest calculator — for savings accounts that credit daily
• Rule of 72 — doubling time at any rate
• "Eighth wonder of the world" — Einstein quote fact-check

FAQ

What is the SBI FD compounding frequency?

Quarterly — SBI FDs compound 4 times per year, on each calendar quarter end.

How is PPF interest calculated?

PPF interest is calculated on the minimum balance between the 5th and last day of each month, then credited annually on March 31. Compounding is effectively annual at 7.1%.

Is FD better than PPF?

For tenures over 15 years and any taxpayer in the 20%+ slab, PPF beats FD due to tax-free interest. For shorter horizons or non-taxable income, FD offers more flexibility (different tenures, premature withdrawal).