State bank of India gives you an Annuity Deposit Scheme where you will deposit a lump sum amount with the bank and get a monthly payment that also has the principal amount and the interest that has accrued on the diminishing principal amount that is held with the bank. They are also called monthly annuity installments. The tenure of the deposits is either three years, five years, seven years, or ten years. The rate of interest is also the same as the term deposit of the same period. Also, the senior citizens would be getting an additional interest rate that is applicable on term deposits. This scheme does not have an upper limit, but the minimum deposit of the scheme is Rs. 25,000. In various cases, you can get a loan of up to 75% of the balance amount. It is transferable among all branches of SBI.
|
Period |
Interest Rate for General Citizens |
Interest Rate for Senior Citizens |
|
7 - 45 days |
2.90% |
3.40% |
|
46 - 178 days |
3.90% |
4.40% |
|
179 - 364 days |
4.40% |
4.90% |
|
1 - 2 years |
5% |
5.50% |
|
2 - 3 years |
5.10% |
5.60% |
|
3 - 5 years |
5.30% |
5.80% |
|
5 - 10 years |
5.40% |
6.20% |
Mentioned below are the features of the SBI Annuity Scheme:
|
1) Premature Payment |
A premature payment under this scheme is allowed in the event of the death of the depositor of the scheme. To prematurely withdraw the deposit by looking for the concurrence of the legal heirs of the deceased or joint account holders. The bank is also entitled to honor the same rule. |
|
2) Facility for Loan |
The scheme allows for an overdraft or loan of up to 75% of the annuity balance amount in certain situations. Following the disbursement of such a loan, periodic annuity payments will be put in the borrower's loan account. |
|
3) Taxes on the Interest Earned |
For Annuity deposits, interest is subject to TDS. The amount of interest calculated is rounded off to the next rupee value; as a result, the last annuity installment may differ. |
|
4) Interest Rates |
Depending on the period chosen by the customer, the SBI annuity FD account offers a return comparable to other SBI term deposits. One-tenth of a percentage point is equal to one basis point. |
|
5) Maturity Amount |
The principal and interest on lowering principal are paid in installments over a period of time in an Annuity deposit Scheme, so the maturity amount remains zero maturity. |
|
6) Eligibility |
The SBI annuity scheme is offered to all Indian residents, including minors. Customers who are NRE or NRO are not eligible for the annuity FD plan. |
Any that is looking forward to an SBI annuity scheme needs to be an individual that would also be inclusive of a minor. The mode of holding could be single or jointly. Any client that falls into the category of NRE and NRO is not eligible to access the facility.
Investing in the SBI annuity scheme has several benefits that are mentioned below:
1) Period of investment: The SBI annuity scheme approaches a varied tenure opportunity, along with maturity options. A depositor who looks for a flexible scheme can choose from alternatives starting from days to 10 years.
2) Mode of Payment: The entire payment would be made in advance only when the depositor has passed away, and it ensures a safe lock-in.
3) Amount of Deposits: The SBI annuity deposit scheme does not have an upper limit of deposition.
4) Loan Opportunity: Within the scheme, the depositor can overdraft a loan facility of up to 75% of the balance sum in the account.