This SBI investment scheme gives assured income every month; check deposit duration, interest rate, premature withdrawal, loan facility, other details
SBI Annuity Deposit Scheme: SBI offers a variety of schemes to their customers, and one of the most beneficial is the SBI Annuity Deposit Scheme. This scheme ensures a fixed monthly income, making it an excellent choice for everyone, whether young or old. It is particularly useful for retirees who need a regular source of income.
What is the SBI Annuity Deposit Scheme?
According to information available on SBI’s website, the SBI Annuity Deposit Scheme requires a lump sum deposit, which provides the depositor with monthly payments consisting of both interest and a portion of the principal amount. The interest rate is equivalent to that of the bank's term deposit (FD). Interest is compounded quarterly based on the remaining balance in the account. Any Indian citizen can take advantage of this scheme.
Deposit Duration Options
In this SBI scheme, you can choose to deposit money for 36, 60, 84, or 120 months, allowing you to secure a regular income for up to 10 years. The applicable interest rate is the same as the FD rate for the chosen tenure. You can open an account at any SBI branch, and there is no maximum deposit limit.
Income Starts the Month After Deposit
There is no maximum deposit limit for this scheme. The annuity payment amount is determined by the deposit amount, with a minimum annuity of Rs 1,000 per month. Payments begin from the scheduled date in the month following the deposit. After depositing the amount, a universal passbook is issued.
Higher Interest for Senior Citizens
Both general customers and senior citizens earn interest based on term deposit rates, but senior citizens benefit from an additional 0.50 per cent interest. You can open an account under the SBI Annuity Deposit Scheme either singly or jointly. The annuity payment is credited to the linked savings or current account after deducting TDS.
Premature Withdrawal
Premature withdrawal is permitted on deposits up to Rs 15 lakh, although a penalty may apply, as per the term deposit rules. If you have deposited more than Rs 15 lakh, the amount up to Rs 15 lakh can be withdrawn, while the remaining balance will continue to generate annuity payments. In the event of the depositor's death, the scheme can be closed prematurely without penalty.
Loan Facility
As per SBI's website, the nomination facility is available for individual account holders. If necessary, you can obtain an overdraft or loan up to 75 per cent of the account balance. However, after taking the loan, annuity payments will be credited to the loan account.