SBI Child Plan Fixed Deposit

The SBI Child Plan Fixed Deposit is a scheme that offers risk-free investment options to secure the financial future of young ones. The SBI is a public sector bank owned and operated by the government of India for the benefit of its citizens. The schemes offer a decent return with varying interest rates for different sections of society. The SBI has structured specific schemes aimed at nurturing women and children.

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  • Invest ₹10k/month and your child gets ₹1 Cr tax free*

  • Save upto ₹46,800 in tax under Section 80(C)

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What Is SBI Child Plan Fixed Deposit?

The SBI child plan fixed deposit is a child-friendly plan catering to the needs of the children. The parents who desire to secure their children financially can opt for fixed deposit schemes that compound their money in a low-risk environment. The bank issues the interest rate in line with the Reserve Bank of India. 

The scheme ensures the need to address the child’s milestones which includes education, marriage and entrepreneurship. This type of fixed deposit is preferred because of its simplicity and risk-averse nature. 

The SBI Term deposit is also available for children and young adults who are preparing for their future. The tenure of the scheme customized for children and women is flexible with no lock-in periods. The scheme can be utilized for long-term investments and as an emergency fund as it can be withdrawn with short notice.

Benefits of SBI Child Plan Fixed Deposits

The schemes offered by the SBI is a win-win condition for all the investors irrespective of the age group and profession. The SBI FDs provide guaranteed returns to the depositor who looks to safeguard his future along with his family. 

Some of the benefits of the FDs are as follows:

  1. Generating interest

    The fixed deposit schemes offer a moderate to low return for the depositors, excluding the risk factors. The fixed deposits have guaranteed returns based on the interest rates that vary depending on the basis points decided by the Reserve Bank of India. The depositor's capital is compounded slowly and consistently by eliminating the risk factor.

  2. Financial Gains for the nominees and beneficiaries

    The SBI Fixed deposit schemes also offer the depositors to add nominees or beneficiaries who would gain from unprecedented events such as the depositor's death. The nominees can claim the deposited sum and stay protected during uncertain times. The depositor can nominate their spouse or children to enjoy the added protection provided to his family by the scheme.

  3. Reasonable Interest Rates

    The SBI Fixed deposits provide varying interest rates depending on the depositor's age, gender, and economic contribution. The SBI Child Plan Fixed Deposit offers one of the best interest rates for children, teenagers and minors. 

  4. Automated Features

    The SBI offers an automated facility to renew the deposit term. The depositor can opt for auto-renewal at the time of investing the capital in the bank. The invested capital on completion of its term will automatically be renewed for the next tenure. The investor can save time and effort by opting for the auto-renewal option.

  5. Tax Benefits

    The SBI FD schemes such as child plan and senior citizens plan offer tax benefits where the capital gains below a specific limit are tax-free. The investors can benefit from such schemes as they help in wealth creation. The investors need to examine the tax benefits of other SBI FD plans before proceeding to invest in them.

How To Open an SBI Child Plan FD Account?

The SBI Child Plan FD can be opened in two ways. The first method is an online method and the second method is the traditional offline method. The procedure to open the Child plan fixed deposit online is as follows.

  1. Online Method

    The pre-existing condition to open the online account is that the investor must access SBI internet banking with valid login credentials.

    The steps to open the SBI Child Plan FD account are as follows:

    • The investor must visit the authorized online domain of the SBI bank.
    • The depositor must enter the web page by using the appropriate credentials assigned to him by the bank. The depositor will be locked out if the incorrect credentials are used for login. The credentials usually include a username and alphanumeric password.
    • On entering the bank's home page, the investor needs to select "Fixed Deposit" on the menu bar at the top of the web page.
    • The investor needs to choose e-TDR/e-STDR under the sub-menu of the “Fixed deposit” tab.
    • The investor needs to choose the appropriate plan for the fixed deposit scheme. In this case, the investor needs to select e-TDR/e-STDR for the child plan. The investor must click "proceed" to be directed to the next page.
    • The investor can link the existing savings account or the current account to the chosen child plan fixed deposit scheme.
    • The linking of accounts makes it easier for the average investor to quickly transfer funds to the fixed deposit account without visiting the bank branch.
    • The bank also provides an option for elderly citizens who have chosen the fixed deposit schemes to avail better interest rates. The elderly investor can select the check box named" Senior Citizen" to get their benefits.
    • The investor must choose the basis on which he needs his interest rates to be received. He can choose between cumulative interest rates or non-cumulative interest rates according to his convenience.
    • The depositor must finalize the interest rates assigned to the specific plan. In this case, he must ensure the interest rate for the Child Plan Fixed deposit matches the one in the brochure of the bank.
    • The investor must also check the options related to the renewal of the plan, tenure, etc.
    • The investor can proceed to submit after ensuring all the mandatory fields in the online form are completed.
  2. Offline Method

    The investor with the traditional approach can visit the nearest SBI bank branch and get in touch with the representatives who will assist him in opening the FD account for his child. The investor must carry all the mandatory documents required for the account opening. 

    The documents needed to open the Child Plan FD account are as follows:

    • The investor must have his identity proof along with his child’s ID. The identity proof can be a passport, AADHAAR card, driving license, etc.
    • The investor must carry address proof such as passport, utility bills such as electricity bills, water bills or a ration card, etc.
    • The bank may ask for documents related to age proof, such as birth certificate, high school certificate, etc.
    • He might also need to submit a few passport size photographs along with those of his child.
    • The investor must also submit bank account details such as the bank statement revealing the proof of transactions and banking activities if the account holder for authorization purposes.

    The investor must note that the above list of documents may be changed as per the bank's requirement. Please contact the bank branch to get more information related to the FD products.

Conclusion

The fixed deposit schemes are suited for different types of investors with various motives. The SBI Child Plan FD caters to the needs of the children as they become adults. Investors with a less-risk appetite can opt for fixed deposit schemes as it is not as volatile as the investments made in the capital markets and bond markets.

The investor can have peace of mind knowing well that his investments are insulated from volatility. If invested for a long duration, the Child Plan FD can provide steady returns to meet the child's future financial needs.

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Written By: PolicyBazaar - Updated: 02 September 2021

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