The State Bank of India (SBI) is a global public sector bank that provides its customers a wide range of schemes and financial services, aiming to secure their financial future and promote capital growth. One of the offerings is the SBI Annuity Deposit Scheme, which allows customers to earn a steady income through their investments. This article will cover the interest rates, eligibility criteria, features, benefits, and other essential details about the SBI Annuity Deposit Scheme.
What is the SBI Annuity Deposit Scheme 2024?
The State Bank of India offers an Annuity Deposit Scheme where you deposit a lump sum amount and receive monthly payments that include both the principal and the interest earned on the decreasing principal balance held by the bank. These monthly payments are known as annuity installments. The deposit terms can be three, five, seven, or ten years, with interest rates matching those of term deposits for the same duration. Senior citizens benefit from an additional interest rate applicable to term deposits.
There’s no upper limit on the deposit amount, but the minimum required is Rs. 36,000. You can also obtain a loan of up to 75% of the balance amount in certain circumstances. Additionally, the scheme allows for transferability across all SBI branches. Let’s talk about the scheme in detail.
| SBI Annuity Deposit Scheme 2024 Key Highlights | |
| SBI Annuity Deposit Scheme Launch Date | 2024 |
| SBI Annuity Deposit Scheme Official Website | SBI ADS Official Website |
| SBI Annuity Deposit Scheme Objective | Allows depositors to make a one-time lump sum payment and receive Equated Monthly Installments (EMIs), compounded quarterly and adjusted to monthly payments. |
| SBI Annuity Deposit Scheme Max Tenure | 3 yrs / 5 yrs / 7 yrs and 10 yrs. |
| SBI Annuity Deposit Scheme Interest Rate | As applicable to Term deposits of tenor |
| SBI Annuity Deposit Scheme Minimum Deposit | Rs 36,000 |
| SBI Annuity Deposit Scheme Max Deposit | No Upper Limit |
| SBI Annuity Deposit Scheme Overdraft/Loan Limit | up to 75% of the balance amount of the annuity may be granted in special cases. |
| SBI Annuity Deposit Scheme Mode of Application | Offline/Online |
| SBI Annuity Deposit Scheme Helpline Number | 1800 1234 |
SBI Annuity Deposit Scheme Features
- Accessibility: Available at all SBI branches in India.
- Minimum Investment: Rs. 25,000.
- Maximum Deposit: No upper limit.
- Nomination: Option to nominate individuals to receive returns.
- Repayments: Monthly repayments comprising principal and interest.
- Payment Dates: Returns on the 1st of the following month if the date is non-existent.
- Universal Passbook: Provided for the scheme and term deposits.
- Deposit Period: Choose from 36, 60, 84, or 120 months.
- Loan Facility: Overdraft or loan up to 75% of the annuity deposit balance.
- Premature Payments: Allowed up to Rs. 15,00,000 with a penalty fee.
SBI Annuity Deposit Scheme Benefits
Investing in the SBI Annuity Scheme offers several advantages:
- Investment Period: The scheme provides various tenure options, allowing depositors to choose flexible terms ranging from a few days to 10 years.
- Mode of Payment: Payments are made in advance if the depositor passes away, ensuring a secure lock-in.
- Deposit Amount: There is no upper limit on the amount that can be deposited in the scheme.
- Loan Facility: Depositors can avail a loan or overdraft of up to 75% of the balance amount in the account.
Post Office Monthly Income Account Scheme 2024 | Get Rs 9300 Interest Per MonthÂ
SBI Annuity Deposit Scheme Components
- Interest Rate: Depends on the chosen tenure; one-tenth of the scheme’s percentage point equals one basis point.
- Eligibility: Open to all Indian residents, including minors; NRIs are not eligible.
- Taxation: TDS charges apply to the returns, rounded off to the next rupee, which may affect the last installment.
- Premature Payment: Allowed upon the investor’s death; legal heirs or joint account holders receive the returns.
- Maturity Amount: Principal and interest on the reduced principal are paid throughout the period, resulting in a zero maturity amount at the end.
SBI Annuity Deposit Scheme Eligibility Criteria
- Resident individuals, including minors.
- Can be held singly or jointly.
SBI Annuity Deposit Scheme Interest Rates (2024)
| Period | Interest Rate for General Citizens | Interest Rate for Senior Citizens |
| 3 – 5 years | 5.30% | 5.80% |
| 5 – 10 years | 5.40% | 6.20% |
Conclusion
Similar to fixed deposits, the SBI Annuity Deposit Scheme is an ideal investment option for those seeking a regular income over the long term. It is especially suitable for investors with a low-risk tolerance. Additionally, since the interest rates for this scheme can change frequently, it is important to check the current rates before applying.
SBI Annuity Deposit Scheme FAQs
What is the SBI Annuity Deposit Scheme?
The SBI Annuity Deposit Scheme allows customers to deposit a lump sum amount, which is repaid over a period in equated monthly installments (EMIs). These EMIs include both the principal and interest on the reducing principal amount. The payments begin on the anniversary date of the month. If the date does not exist (e.g., 29th, 30th, or 31st), payment will be made on the 1st of the following month.
How is an Annuity Deposit different from a Recurring Deposit account?
In a Recurring Deposit account, customers make payments in installments and receive the maturity amount at the end of the term. In an Annuity Deposit, a one-time deposit is made, and the amount plus interest on the reducing principal is repaid in installments over the selected tenure.
What will be the maturity amount in an Annuity Deposit?
In an Annuity Deposit, as both principal and interest are paid in installments over time, the maturity amount will be zero at the end of the term.
What is the minimum and maximum limit for an Annuity Deposit?
The minimum deposit amount is based on a minimum monthly annuity of Rs. 1,000 for the relevant period. For example, for a 3-year period, the minimum deposit amount would be Rs. 36,000. The maximum amount limit through Internet Banking is the same as the limit for fund transfers within your own account.
What is the minimum and maximum period for an Annuity Deposit?
The available tenures for an Annuity Deposit are 3, 5, 7, and 10 years.
What will the rate of interest be?
The interest rate will be the same as that applicable to term deposits for the chosen tenure.
Can I close my Annuity Deposit account online?
No, premature closure is only permitted at a branch and in case of the depositor’s death.
Is the SBI Annuity Deposit subject to TDS?
Yes, the interest payable on an Annuity Deposit is subject to TDS. The interest amount is rounded down to the nearest rupee, which may cause variations in the last annuity installment.
How is an Annuity Deposit different from a Fixed Deposit account?
In a Fixed Deposit account, a one-time deposit is made, and the maturity amount, including principal and interest, is received at the end of the term. In contrast, an Annuity Deposit repays the one-time deposit along with interest in equated monthly installments over the selected tenure.
Who can avail of this facility?
All resident individuals, including minors, can avail of this facility. NRO and NRE customers are not eligible.
From which types of accounts can I debit an amount for the Annuity Deposit?
You can debit a savings, current, or OD account to open an Annuity Deposit account. The selected account must be a valid transactional account through the Internet Banking channel and should not be stopped, dormant, or locked.
