Last reviewed: 10 October 2026. Rates and rules checked against SBI’s official Multi Option Deposit (MOD) page and its retail domestic term deposit rate card.
The SBI Multi Option Deposit (MODS) is a term deposit tied to your savings account: surplus money above a set level moves into a fixed deposit on its own, and comes back in small units whenever your savings balance runs short. You earn FD interest on cash that would otherwise sit at the savings rate, yet you can still pay bills or use the ATM without breaking the whole deposit. SBI pays its regular term deposit card rate on MOD units, and that card has been in force since 15 December 2025. The RBI raised the repo rate to 5.50% on 7 October 2026; SBI had not revised its retail card when we checked, so the rates below pre-date the hike.
SBI Multi Option Deposit: key facts
| Feature | What SBI offers |
|---|---|
| Interest rate | Term deposit card rate for the tenure (6.25% to 6.40% for 1 to under 5 years, general public, w.e.f. 15 December 2025) |
| Minimum deposit | ₹15,000, then in multiples of ₹5,000 |
| Maximum deposit | No limit |
| Tenure | 1 to 5 years |
| Auto sweep trigger | Savings balance above ₹50,000; at least ₹35,000 stays in savings after the sweep |
| Withdrawal | Reverse sweep in multiples of ₹5,000, last in first out by default (first in first out on request) |
| Interest payout | Quarterly, compounded by default |
| Premature withdrawal | Only the units broken attract the penalty; the rest keep the original rate |
| Loan facility | Available; units cannot be broken while a lien is marked |
| Tax treatment | Interest taxable at slab rate; TDS applies |
| Who it suits | Salaried people and households with a large, uneven savings balance |
Current SBI Multi Option Deposit interest rates
SBI’s MOD page does not print a rate of its own. It links to the term deposit card, so the rate depends on the tenure you pick for the MOD.
| MOD tenure | General public | Senior citizens |
|---|---|---|
| 1 year to less than 2 years | 6.25% | 6.75% |
| 2 years to less than 3 years | 6.40% | 6.90% |
| 3 years to less than 5 years | 6.30% | 6.80% |
| 5 years | 6.05% | 7.05%* |
Source: SBI retail domestic term deposit rates for deposits below ₹3 crore, effective 15 December 2025. *The 7.05% senior figure on SBI’s card includes a 50 basis point SBI We-care premium; the MOD page does not confirm whether that premium applies to MOD units, so check with your branch. SBI says senior citizens get the additional rate on MODs, but super senior citizens do not get the extra SBI Patrons benefit.
How the sweep works
Once your savings balance goes over ₹50,000, money above the ₹35,000 floor is moved into MOD units, subject to the ₹15,000 minimum and ₹5,000 multiples. If a cheque, online payment or ATM withdrawal needs more than your savings balance, SBI breaks just enough ₹5,000 units to cover it. If the MOD balance falls to ₹15,000, the whole remainder returns to savings. Auto sweep is open to Savings Plus, salary package and wealth customers, plus minors; anyone can also open a stand-alone MOD at any time.
Worked example: SBI Multi Option Deposit vs a plain savings account
Say your savings account holds ₹2,00,000. Using the thresholds above, roughly ₹1,65,000 would be swept into a one-year MOD at 6.25%, leaving ₹35,000 in savings. Interest is compounded quarterly: interest = P × ((1 + r/4)^(quarters) minus 1).
| Scenario | Working | Interest in one year |
|---|---|---|
| ₹1,65,000 left in savings at 2.50% | 1,65,000 × 2.50% | about ₹4,125 |
| ₹1,65,000 in MOD, untouched | 1,65,000 × ((1.015625)^4 minus 1) | ₹10,556.73 |
| Same MOD, ₹50,000 pulled out after six months | ₹50,000 at 5.65% minus 0.50% penalty = 5.15% for two quarters: ₹1,295.79; ₹1,15,000 stays at 6.25% for four quarters: ₹7,357.72 | ₹8,653.51 |
| Senior citizen, ₹1,65,000 untouched at 6.75% | 1,65,000 × ((1.016875)^4 minus 1) | ₹11,422.60 |
Even with a mid-year withdrawal and a penalty on the broken units, the MOD earns about twice what the same money would earn in savings. Savings interest uses SBI’s 2.50% rate, effective 15 June 2025. Actual figures can differ slightly because banks count days, not whole quarters.
Pros and cons
Pros
- FD returns on idle savings without giving up access to the money.
- Only the units you need are broken; the rest keep earning the contracted rate.
- Cheque, ATM and online payments from your savings account can draw on MOD units automatically.
- No maximum limit and a low ₹15,000 entry point.
Cons
- Every broken unit carries a premature penalty, so frequent dips eat into returns.
- No deposit advice is issued for auto sweep units, which makes tracking harder.
- Super senior citizens do not get the extra SBI Patrons benefit on MODs.
- The ₹35,000 floor that stays in savings earns only 2.50%.
Rules and charges
A broken unit earns the card rate for the period it actually stayed with the bank, minus SBI’s penalty. SBI’s term deposit penalty rules, in force since 1 April 2017, set this at 0.50% for deposits up to ₹5 lakh and 1% above ₹5 lakh and below ₹1 crore, applied to the lower of the rate for the period run or the contracted rate. Deposits that run for less than seven days earn no interest. At maturity, the MOD balance is credited back to the linked savings account. Nomination is copied from the savings account and can be changed.
Eligibility and documents
Any individual can open a MOD singly or jointly, and minors can open one through a guardian. The linked savings account must be KYC compliant; SBI will not sweep money from an account that is not. You can set up a stand-alone MOD at the branch or through internet banking without any extra paperwork beyond your existing KYC.
Tax and TDS
MOD interest is fully taxable at your slab rate, whether it is paid out or compounded. Banks deduct TDS when your total deposit interest at that bank crosses ₹50,000 in a financial year, or ₹1 lakh for senior citizens. If your income is below the taxable limit, submit Form No. 121 under section 393(6) or 393(7) of the Income-tax Act, 2025, which replaces Forms 15G and 15H. MOD balances are bank deposits, so DICGC insurance covers up to ₹5 lakh per depositor per bank, principal and interest combined.
How it compares
| Option | Rate (1 year) | Access to money | Penalty on early exit |
|---|---|---|---|
| SBI Multi Option Deposit | 6.25% | Any time, in ₹5,000 units | Only on units broken |
| SBI savings account | 2.50% | Any time | None |
| SBI regular FD | 6.25% | Only by closing the deposit | On the whole deposit |
| Post Office 1 year time deposit | 6.9% (Oct to Dec 2026) | Not before six months | Reduced rate |
The post office rate is from the quarterly notification covered in our report on small savings rates for October to December 2026. Our SBI FD interest rates page carries the full card for every tenure.
Our verdict
For anyone who keeps more than ₹50,000 in an SBI savings account, the Multi Option Deposit is close to a no-brainer: it roughly doubles what idle cash earns and still lets you spend it. It is not a replacement for a dedicated long-term FD, because each dip costs a penalty, but as a parking place for your emergency fund it works well. With the repo rate higher since 7 October, keep the MOD tenure short (one year) so new sweeps can pick up any revised card quickly. You can see how we score deposit products on our rating methodology page.
How to open an SBI Multi Option Deposit
- Log in to SBI internet banking or YONO, or visit your home branch.
- Choose MOD under deposits, pick the tenure and link it to your savings account.
- For auto sweep, ask the branch to enable it if your account type qualifies.
- Check the terms on SBI’s official Multi Option Deposit page.
FAQs
What interest does the SBI Multi Option Deposit pay?
The term deposit card rate for the chosen tenure: 6.25% for one year and up to 6.40% for 2 to under 3 years for the general public, effective 15 December 2025.
What is the minimum balance for SBI MODS auto sweep?
Your savings balance must cross ₹50,000, and at least ₹35,000 stays in savings. The minimum MOD is ₹15,000 in multiples of ₹5,000.
Is there a penalty when money is pulled back from a MOD?
Yes, but only on the units broken. They earn the rate for the period held, less the penalty. The rest of the deposit is unaffected.
Is MOD interest taxable?
Yes, at your slab rate. TDS applies once your annual deposit interest at SBI crosses ₹50,000, or ₹1 lakh for seniors.
Can senior citizens get a higher MOD rate?
Yes, seniors get the additional rate, typically 0.50% over the general card. Super seniors do not get the extra SBI Patrons premium on MODs.
This article is for informational purposes only and does not constitute investment advice.
