Are you looking for a way to invest your savings and get a regular income? Do you want to avoid the risk of market fluctuations or inflation on your returns? Do you want to enjoy tax benefits on your investment? If yes, then you might be interested in the SBI Annuity Deposit Scheme.
The SBI Annuity Deposit Scheme is a type of fixed deposit scheme that allows you to invest a lump sum amount and receive monthly payments that include both the principal and interest. The interest is calculated on the reducing principal amount and compounded quarterly. The monthly payments are called annuities.
The SBI Annuity Deposit Scheme offers attractive features and benefits for investors who want to secure their future income. It also offers competitive interest rates and eligibility criteria for different categories of customers. In this blog post, we will explain everything you need to know about the SBI Annuity Deposit Scheme, such as:
- What is an annuity deposit scheme and how it works
- What are the features of the SBI annuity deposit scheme
- What are the benefits of the SBI annuity deposit scheme
- What are the interest rates of the SBI annuity deposit scheme
- How to apply for the SBI annuity deposit scheme
By the end of this blog post, you will have a clear idea of whether the SBI annuity deposit scheme is suitable for you or not. So, let’s get started!
What is an Annuity Deposit Scheme?
An annuity deposit scheme is a type of fixed deposit scheme that allows you to invest a lump sum amount and receive monthly payments that include both the principal and interest. The interest is calculated on the reducing principal amount and compounded quarterly. The monthly payments are called annuities.
An annuity deposit scheme is different from a regular fixed deposit scheme in two ways:
- In a regular fixed deposit scheme, you receive the principal and interest at maturity, whereas in an annuity deposit scheme, you receive them in monthly installments.
- In a regular fixed deposit scheme, the interest is calculated on the initial principal amount, whereas in an annuity deposit scheme, the interest is calculated on the reducing principal amount.
An annuity deposit scheme can be useful for investors who want to get a fixed monthly income for a certain period of time. For example, if you invest Rs. 10 lakhs in an annuity deposit scheme for 10 years at an interest rate of 5.4% per annum, you will get Rs. 11,338 per month for 10 years. This way, you can use your savings to get a regular income without worrying about market fluctuations or inflation.
Features of SBI Annuity Deposit Scheme
The SBI Annuity Deposit Scheme is one of the annuity deposit schemes offered by State Bank of India (SBI), which is India’s largest public sector bank. The SBI Annuity Deposit Scheme has the following features:
- Period of deposit: You can choose the period of deposit from 36, 60, 84 or 120 months.
- Minimum deposit amount: The minimum deposit amount for the SBI annuity deposit scheme is Rs. 25,000/-.
- Minimum monthly annuity: The minimum monthly annuity for the SBI annuity deposit scheme is Rs. 1000/- for the relevant period.
- Interest rate: The interest rate for the SBI annuity deposit scheme is the same as the term deposit of the same period. As of January 2023, the interest rates are as follows:
| Period | Interest Rate for General Citizens | Interest Rate for Senior Citizens |
| 36 months | 5.1% | 5.6% |
| 60 months | 5.3% | 5.8% |
| 84 months | 5.4% | 6% |
| 120 months | 5.4% | 6.2% |
- Additional interest rate for senior citizens: Senior citizens (aged 60 years and above) can get an additional interest rate of 0.5% for deposits up to Rs. 2 crores.
- Loan or overdraft facility: You can get a loan or overdraft of up to 75% of the balance amount of annuity in some cases.
- Transferability among branches: You can transfer your annuity deposit among different branches of SBI without any hassle.
- Nomination facility: You can nominate an individual as the beneficiary of your annuity deposit in case of your death.
- Universal passbook: You can get a universal passbook to track your annuity deposit transactions and balance.
- Premature payment: You can get a premature payment of your annuity deposit in case of death of the depositor, with the consent of the legal heirs or joint account holders. The bank will charge a penalty as applicable to term deposits.
Benefits of SBI Annuity Deposit Scheme
The SBI Annuity Deposit Scheme offers several benefits for investors who want to secure their future income. Some of the benefits are:
- Guaranteed monthly income for a fixed period: The SBI annuity deposit scheme gives you a guaranteed monthly income for a fixed period of time, depending on your choice of deposit. You don’t have to worry about market fluctuations or inflation affecting your returns.
- No risk of market fluctuations or inflation: The SBI annuity deposit scheme is a safe and secure investment option that does not depend on the performance of the stock market or the economy. You get a fixed interest rate on your deposit, which is compounded quarterly and discounted to monthly value. You don’t have to worry about market fluctuations or inflation affecting your returns.
- Tax benefits under section 80C of the Income Tax Act: The SBI annuity deposit scheme is eligible for tax benefits under section 80C of the Income Tax Act, 1961. You can claim a deduction of up to Rs. 1.5 lakhs from your taxable income for the amount invested in the scheme. However, the interest earned on the scheme is taxable as per your income tax slab.
- Flexibility to choose the period and amount of deposit: The SBI annuity deposit scheme gives you the flexibility to choose the period and amount of deposit as per your convenience and financial goals. You can choose from 36, 60, 84 or 120 months as the period of deposit and any amount as long as the minimum monthly annuity is Rs. 1000/-.
- Liquidity in case of emergency or need: The SBI annuity deposit scheme provides you with liquidity in case of emergency or need. You can get a loan or overdraft of up to 75% of the balance amount of annuity in some cases. You can also get a premature payment of your annuity deposit in case of death of the depositor, with the consent of the legal heirs or joint account holders.
Interest Rates of SBI Annuity Deposit Scheme
The interest rates of the SBI annuity deposit scheme are the same as the term deposit of the same period. As of January 2023, the interest rates are as follows:
| Period | Interest Rate for General Citizens | Interest Rate for Senior Citizens |
| 36 months | 5.1% | 5.6% |
| 60 months | 5.3% | 5.8% |
| 84 months | 5.4% | 6% |
| 120 months | 5.4% | 6.2% |
The interest rates are subject to change by SBI from time to time. You can check the latest interest rates on the official website of SBI or use the SBI annuity deposit scheme calculator to find out how much monthly annuity you can get for a given deposit amount and period.
The SBI annuity deposit scheme calculator is an online tool that helps you to calculate the monthly annuity for a given deposit amount and period. You can use the calculator by entering the following details:
- Deposit amount
- Period
- Interest rate
The calculator will show you the monthly annuity that you can get for your deposit amount and period. You can also see how much principal and interest are included in each monthly annuity.
You can use the SBI annuity deposit scheme calculator to compare different plans and choose the one that suits you best. You can also use it to plan your retirement income and budget accordingly.
How to Apply for SBI Annuity Deposit Scheme?
To apply for the SBI annuity deposit scheme, you need to meet the following eligibility criteria:
- You should be an Indian resident
- You should be above 18 years of age
- You should have a savings or current account with SBI
- You should have a PAN card
To apply for the SBI annuity deposit scheme, you need to submit the following documents:
- Application form
- Identity proof (such as Aadhaar card, PAN card, passport, etc.)
- Address proof (such as Aadhaar card, passport, utility bill, etc.)
- Deposit amount (in cash or cheque)
You can apply for the SBI annuity deposit scheme online or offline.
To apply online, you need to follow these steps:
- Visit the official website of SBI and log in to your internet banking account
- Go to e-fixed deposits and select e-Annuity Deposit under e-TDR/e-STDR
- Enter the deposit amount, period and nominee details
- Confirm your details and submit your request
- Your annuity deposit account will be opened and you will receive a confirmation message
To apply offline, you need to follow these steps:
- Visit your nearest SBI branch and ask for the annuity deposit scheme application form
- Fill up the form with your details and attach the required documents
- Submit the form and the deposit amount to the branch officer
- Your annuity deposit account will be opened and you will receive a passbook
Conclusion
The SBI Annuity Deposit Scheme is a great option for investors who want to get a guaranteed monthly income for a fixed period of time. It offers attractive features and benefits such as:
- Guaranteed monthly income for a fixed period
- No risk of market fluctuations or inflation
- Tax benefits under section 80C of the Income Tax Act
- Flexibility to choose the period and amount of deposit
- Liquidity in case of emergency or need
The SBI Annuity Deposit Scheme also offers competitive interest rates and eligibility criteria for different categories of customers. You can check the latest interest rates on the official website of SBI or use the SBI annuity deposit scheme calculator to find out how much monthly annuity you can get for a given deposit amount and period.
If you are interested in applying for the SBI Annuity Deposit Scheme, you can do so online or offline by following the simple steps mentioned above. You will need to submit some basic documents and meet some eligibility criteria to open your annuity deposit account.
We hope this blog post has helped you to understand the SBI Annuity Deposit Scheme better and make an informed decision. If you have any queries or feedback, please feel free to share them in the comments section below. Thank you for reading and happy investing!
