SBI reinvestment plan: There is no maximum limit for deposits, according to the bank.State Bank of India (SBI), the largest lender of the country, offers a variety of products ranging from savings accounts to fixed deposits (FDs).

One such product offered by SBI is the reinvestment plan, which works like a fixed deposit (FD).

The only difference between the two is that in a reinvestment plan, instead of Interest being paid out at a regular frequency during the period of deposit, it is paid out only at the time of maturity.

Regular interest is added to the principal and compound interest calculated and paid thereon, according to SBI's corporate website, sbi.co.in.1.

Customers willing to invest in reinvestment scheme need to pay a minimum of Rs 1,000.2.

There is no maximum limit for deposits under SBI's reinvestment plan.3.

The interest rate is same as applicable to SBI's fixed deposits with quarterly compounding.

Interest is paid out on maturity only, according to SBI.

The following FD interest rates are applicable on deposits below Rs.

1 crore, according to the bank's website:Maturity period (term)Interest rate with effect from July 30, 2018General publicSenior citizen7 days to 45 days5.75%6.25%46 days to 179 days6.25%6.75%180 days to 210 days6.35%6.85%211 days to less than 1 year6.4%6.9%1 year to less than 2 year6.7%7.2%2 years to less than 3 years6.75%7.25%3 years to less than 5 years6.8%7.3%5 years and up to 10 years6.85%7.35%(Source: sbi.co.in)4.

The minimum tenure for SBI's reinvestment plan is six months and the maximum is 10 years.5.

The facility of premature withdrawal is available.

For retail fixed deposit (FD) up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 per cent.6.

For retail fixed deposits above Rs 5 lakh but below Rs 1 crore, applicable penalty is 1 per cent.7.

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 SBI 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, said SBI.8.

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.9.

Customers can avail a loan or overdraft up to 90 per cent of the money available plus accrued interest, at 1 per cent above the fixed deposit or FD interest rate.10.

SBI exercises an auto renewal on the reinvestment plan if maturity instructions are not given.