State Bank of India (SBI) runs many such savings and investment schemes, which help the middle class to create a big fund in a short time. ‘Har Ghar Lakhpati’ is one such great scheme of SBI. This is a recurring deposit (RD) scheme, in which you can create a fund of ₹ 1 lakh to ₹ 10 lakh by depositing small amounts every month. So, if you also want to create a big fund for the future, then this scheme of SBI can prove to be a great option for you. Let’s know about this scheme in detail.

Deposit a small amount every month and get attractive interest

In this scheme, SBI gives interest on the amount deposited every month. The interest is compounded every three months, which means you get interest on interest as well. The interest rate varies according to the period of RD. So, how beneficial is this scheme in terms of investment and returns? Who can take this scheme with such an investment amount? How much interest is received? And how to create a fund of ₹ 1 lakh or more from this scheme? Let’s understand.

Golden opportunity for every Indian citizen

Any Indian citizen can invest in this scheme. Individuals can open single or joint accounts in it! Parents can also open an account for their child above 10 years of age. SBI’s ‘Har Ghar Lakhpati’ RD scheme is a good option for all those investors who want to deposit their target amount in the stipulated time by saving regularly every month. This scheme is an excellent means of saving for people of all classes.

Senior citizens will get more benefits

In this scheme, general citizens are being given a maximum interest of 6.75%, and senior citizens a maximum of 7.25% per annum. These interest rates are similar to fixed deposits and can change according to your deposit period. Senior citizens get higher interest, and their savings grow even faster.

Investment option from 3 years to 10 years

The maturity period of the ‘Har Ghar Lakhpati’ scheme is usually from 3 years to 10 years. That is, you can invest for 3 years to 10 years according to your convenience and financial goal. In long-term investment, you get more benefit of compounding, due to which your fund grows faster.

Different installments starting from ₹593 to ₹25020

In SBI’s ‘Har Ghar Lakhpati’ scheme, a calculation of the estimated amount that senior citizens and general citizens will have to deposit every month to raise a fund of ₹10 lakh is given below:

  • If you invest ₹593 every month, then it will become ₹1 lakh in the next 10 years:-
  • To raise ₹10 lakh in 3 years, you will have to invest ₹25020 every month.
  • To create a fund of ₹10 lakh in 4 years, the investment amount will be ₹18120.
  • To raise ₹10 lakh in 5 years, you have to invest ₹13910
  • To create ₹10 lakh in 10 years, you have to invest ₹5760 every month.

Interest income up to ₹40,000 is tax-free

If the interest income from a recurring deposit (RD) is up to ₹40 thousand, then no tax will have to be paid. In the case of senior citizens, this limit has been fixed at ₹50 thousand. If the income is more than this, then 10% TDS is deducted! So, if your interest income exceeds this limit, then you will have to pay tax.

Get an exemption by filling Form 15G/15H

If you do not fall in the tax bracket, then fill out Form 15H-15G. Senior citizens have to submit Form 15H to the bank, and others have to submit Form 15G. Form 15G or Form 15H is a self-declaration form. In this, you state that your income is outside the tax limit. By submitting this form, your TDS will not be deducted.