How does the SBI Annuity Deposit Scheme work?
The SBI Annuity Deposit Scheme is one of the top creations of the State Bank of India, which allows you to pay a single, one-time lump sum to get the same amount in EMIs or Equated Monthly Instalments. The EMI will consist of a part of the principal amount along with the interest of the amount that gets discounted to the monthly value and compounded at quarterly rests. The SBI Deposit Scheme is also called the monthly annuity installment whose tenure is three, five, seven, or ten years.
The SBI Deposit Scheme is incredibly useful to compound your savings and make them grow with time. Moreover, you also get many other attractive features and interest rates that you can benefit from.
Features of the SBI Annuity Deposit Scheme
The SBI Annuity Deposit Scheme has several unique features that make it an attractive investment choice. You can go through all the features given below to understand why it can be a great option for you as well.
- The deposit amount depends on Rs. 1000, the minimum monthly annuity for the period.
- You can make premature payments for your deposit up to Rs. 15 lakh. However, penalties are also charged as allotted for the term deposits. At the same time, there can be unlimited premature payment at the depositor’s demise.
- There is no upper limit for the maximum deposit.
- The interest rate applies to term deposits for senior citizens and the public.
- The Deposit Scheme has a minimum amount of Rs. 25,000.
- You can access the SBI Annuity Deposit Scheme from any SBI branch in India except those with a specialized credit intensive.
Interest Rates of the SBI Annuity Deposit Scheme
Discover the interest rates of the Deposit Scheme from the table given below for both public and senior citizens.
| Period | Interest Rates for Senior Citizens (p.a.) | Interest Rates for Public (p.a.) |
| 7 days to 45 days | 3.50% | 3.00% |
| 46 days to 179 days | 5.00% | 4.50% |
| 180 days to 210 days | 5.75% | 5.25% |
| 211 days to less than a year | 6.25% | 5.75% |
| 1 year to less than 2 years | 7.30% | 6.80% |
| 2 years to less than 3 years | 7.50% | 7.00% |
| 3 years to less than 5 years | 7.00% | 6.50% |
| 5 years and up to 10 years | 7.50% | 6.50% |
Eligibility of the SBI Annuity Deposit Scheme
The eligibility of the Deposit Scheme is straightforward. To be eligible for the Deposit, you need to be a resident individual of India, even if you are a minor. And the mode of holding should be joint or single. Further, you are not eligible to use the Scheme if you fall under the category of NRO and NRE.
Benefits of the SBI Annuity Deposit Scheme
You can explore many benefits by investing in the SBI Deposit Scheme. It is advantageous for everyone, and some of the below benefits are the ones that you can enjoy by availing of the Scheme.
Investment Period
The SBI Deposit Scheme gives you the option of choosing a flexible tenure that can be anywhere between some days to 10 years. The varied tenure opportunity gives you many maturity options.
Deposit Amount
You do not have a limit on the amount deposited in the scheme. Therefore, you can invest as much as you want to.
Loan Opportunity
Within the SBI Deposit Scheme, you get the option of getting a loan of up to 75% of the balance sum in your account.
Conclusion
The SBI Annuity Deposit Scheme is incredibly useful, and it's a great financial opportunity. You can invest as much as you want in the scheme and get its benefits for a long tenure. You also get favorable interest rates that compound as the scheme matures. Overall, the SBI Deposit Scheme ensures you save money while getting the appropriate interest, all with the tax benefits under the Income Tax Act’s section 80C.
What is the difference between a fixed deposit account and an annuity deposit?
When you open a fixed deposit account, you make an initial transaction for which you can get an amount, including the principal and interest. On the contrary, you get to make a one-time deposit in annuity schemes, and then you are given back the amount with interest after a specific tenure in the form of EMIs.
Is it possible to make premature payments towards the SBI Annuity Scheme?
You are generally not permitted to make premature payments. However, premature payment is allowed in the case of the depositor’s demise.
Can I use another account’s money to open the SBI Annuity Scheme account?
Yes, you can transact the scheme amount from another savings or current account. However, the account that you choose for debiting the amount should have a valid transactional account through a medium of Internet banking.
Is there a minimum and maximum amount for the SBI Deposit Scheme?
Yes, the minimum amount that you can deposit towards the Annuity is a minimum monthly of Rs. 1000 for the period. And you do not have to abide by any maximum limit; you can deposit as much as you want.
What is the maximum and minimum period of deposit for the SBI Annuity Scheme?
The annuity deposit is available for ten, seven, five, or three years. You can pick whichever tenure that suits you.