SBI new interest rates on ‘Har Ghar Lakhpati Scheme’, Deposit Rs.610 per month and become Lakhpati

The State Bank of India (SBI) has recently reduced the interest rates for its popular ‘Har Ghar Lakhpati’ recurring deposit (RD) scheme by 0.20%. Following this revision, general citizens will now earn a maximum of 6.55% annual interest, while senior citizens will receive up to 7.05%. Despite the small reduction, the scheme remains an attractive option for individuals looking to build a substantial savings fund by depositing small amounts regularly.

What is the ‘Har Ghar Lakhpati’ Scheme?

‘Har Ghar Lakhpati’ is a special type of Recurring Deposit offered by SBI. The scheme is designed to help people save small amounts monthly and accumulate ₹1 lakh or more over time. For instance, if you deposit ₹610 every month for 10 years, you’ll have around ₹1 lakh at maturity, thanks to the compounding interest. The scheme is flexible, with maturity periods ranging from 3 to 10 years, making it suitable for different financial goals.

A Recurring Deposit (RD) is a savings tool that allows you to deposit a fixed amount every month and earn interest on it. It works like a systematic piggy bank, where your small contributions add up to a significant sum over time. RDs are perfect for people who want to cultivate a saving habit while earning steady returns without taking market risks. At maturity, you get the total deposited amount along with the accumulated interest.

Who Can Open an Account?

The scheme is open to all Indian citizens. Individuals can open an RD account either singly or jointly. Parents can open an account with their children — if the child is above 10 years of age and able to sign, the account can be in the child’s name. For children under 10 years, a joint account can be opened with a parent or legal guardian.

Tax Rules on RD Interest

Interest earned from an RD is subject to taxation. However, if your interest income from RD is below ₹40,000 per year (or ₹50,000 for senior citizens), no tax is deducted. If it exceeds this limit, 10% TDS (Tax Deducted at Source) is applied.

If your total annual income is below the taxable limit, but your RD interest exceeds ₹40,000/₹50,000, you can submit Form 15G (for regular individuals) or Form 15H (for senior citizens) to the bank. These are self-declaration forms that help prevent TDS deduction if your income is genuinely non-taxable.

Importance of This Scheme

Even with the revised interest rates, the ‘Har Ghar Lakhpati’ scheme remains a safe, disciplined, and practical savings option. It is particularly beneficial for individuals with modest incomes who want to gradually build a secure financial base. The scheme promotes regular saving habits and is well-suited for long-term goals like education, emergencies, or future investments.

SBI’s ‘Har Ghar Lakhpati’ RD scheme offers an easy and low-risk way to accumulate wealth over time. With reduced interest rates of 6.55% for general citizens and 7.05% for senior citizens, it still provides a reliable option for conservative investors. If you’re planning to start a savings habit, this scheme could be a great starting point to become a “lakhpati” the smart way — one small deposit at a time.