SBI Annuity Deposit Scheme: The State Bank of India (SBI) has introduced an annuity deposit scheme. The one-time lump sum amount is deposited and it is paid back to customers in equated monthly installments (annuity) with the principal and interest amount.
This scheme is mainly considered for senior citizens, Pensioners, and those who need no risk investment. Also, the interest rates are the same as that of term deposits for both general and senior citizens. The SBI annuity scheme is available for the tenure of 3 Years, 5 Years, 7 years, and 10 Years.
Let us see in detail about the SBI annuity deposit scheme in this article.
Key Features:
Deposit Amount:
- Minimum investment: ₹25,000.
- There is no maximum investment limit.
Tenure:
- 36 months (3 Years),
- 60 months (5 Years),
- 84 months (7 Years),
- 120 months (10 Years).
Interest Rate:
- The interest rate for the annuity deposit is the same as that of the SBI Fixed deposit.
- Also, the interest rate for the senior citizen is higher than the general citizen.
Monthly Payout:
- The principal amount and its interest amount are calculated in total and it is differentiated as a monthly payout within the scheme time limit.
- Thus, the payout is returned each month as an installment.
Premature Withdrawal:
- Premature withdrawal is allowed only for critical situations.
- Moreover, Premature withdrawal gets the penalty.
- Premature closure is allowed for the deposits up to Rs.15 Lakhs.
- Only when the depositor is dead, the joint account holder or nominee is allowed to withdraw the amount.
Overdraft/Loan Facility:
- 75% of the loan facility is availed on the deposit amount in the annuity deposit scheme.
- Only for the special cases such as marriage, education, or emergency.
Tax:
- In an annuity deposit scheme, the interest rate earned by the depositors is subject to Tax deduction at Source (TDS).
Nomination:
- A nomination facility is available.
- You can nominate a person to get the amount in case of death.
SBI Annuity Deposit Scheme Eligibility:
- The person must be an Indian citizen.
- Minors are eligible but with a guardian’s guidance.
- Companies and cooperatives are eligible to avail of this scheme.
- Moreover, NRIs are not allowed.
- Account holders can be a single account or a joint account.
Interest Rate:
| Time limit | General Citizen | Senior Citizen |
| 7 days to 45 days | 3.50 | 4.00 |
| 46 days to 179 days | 5.50 | 6.00 |
| 180 days to 210 days | 6.25 | 6.75 |
| 211 days < 1 Year | 6.50 | 7.00 |
| 1 Year < 2 Years | 6.80 | 7.30 |
| 2 Years < 3 Years | 7.00 | 7.50 |
| 3 Years < 5 Years | 6.75 | 7.25 |
| 5 Years to 10 Years | 6.50 | 7.50 |
How It Works:
Investment:
- Make an investment of a large amount once.
Account:
- The total investment along with the interest is calculated and divided into monthly income.
Monthly Income:
- Customer will get the scheme income for each month on their account.
Benefits:
- Regular monthly income is provided.
- Also, the Senior citizens get higher interest rates.
- Security and safety are provided for the Deposit amount and interest amount.
- Further, there is no limit to the maximum investment.
- Moreover, the investment period is from days to 10 years.
Documents required:
Identity Proof
- Passport
- Aadhar Card
- Driving License
- PAN Card
- Voter Card
- Passport size Photograph.
How to Apply:
Online Application:
- Visit the SBI Net Banking or YONO App and log in using the credentials.
- Then, select the menu Deposits and choose the Fixed Deposit option.
- In that select “Annuity Deposit Scheme” .
- Fill out the details such as deposit amount, and tenure.
- Also, preview the details and maturity date.
- Provide the transaction password and submit the form.
- Thus, the annuity deposit scheme is opened and the investor will get the confirmation in SMS with the reference number.
On Branch:
- Visit the nearest SBI branch.
- Get the SBI Annuity Deposit Scheme form and fill out the form.
- Also, fill in the time limit.
- Moreover, submit the form along with the required documents.
- Finally, pay the deposit amount you chose in the branch.
- Thereafter, get the annuity deposit certificate.
Example:
- A Customer is investing Rs.5,00,000 in this deposit scheme
- Time Limit: 10 Years.
- Interest rate: 6.50%.
- The customer will get Rs.7,940 as a monthly installment.
Calculation:
A = P (1+r/n)^(n*t)
A= Maturity Amount
P= Principal Amount
r = rate of interest
n = number of times the interest compounded in a year
t = total tenure
A = 5,00,000 * (1 + 0.065/4)^(4*10)
A = 9,52,780
The maturity amount is Rs. 9,52,780 and the interest paid back is Rs.4,52,780.
Monthly installment for 5 Years = 9,52,780 / 120 (months)
= Rs. 7,940
SBI annuity deposit scheme is a very useful scheme for Senior citizens, Retired, or those who need a regular monthly income. It is a long-term investment that provides security and financial stability to the investors.
Read more SBI Savings Accounts for Minors