Immediate Annuity Plan vs. Fixed Deposit in India

Immediate Annuity Plans and Fixed Deposits are investment options in India that cater to the different financial needs of individuals. Immediate Annuity Plans focus on providing a steady income stream throughout your retirement, while Fixed Deposits are known for guaranteed returns and easy access. These two investment plans ensure safe and risk-free investments.

Read more
Best Investment Plans
  • Save upto ₹46,800 in tax under Sec 80C

  • Inbuilt Life Cover

  • Tax Free Returns Unlike FD+

Get Guaranteed returns upto 7.5%*
Invest in 100% Guaranteed Return Plans with Tax benefits under sec 80C & No Tax on returns*
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp
We are rated~
rating
58.9 Million
Registered Consumer
51
Insurance Partners
26.4 Million
Policies Sold

What are Immediate Annuity Plans?

Immediate annuity plans are financial products designed to provide a steady income stream immediately. In contrast to other pension plans, you don't wait to receive benefits.

Here's how it works:

You pay a one-time lump sum upfront to the insurance company. They then use that money to generate guaranteed income payments that start immediately, usually within a month of your investment. This can be a good option for retirees who need a reliable source of income to supplement their Social Security or pension.

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
VIEW PLANS
*For annual premium upto ₹5 Lacs

  1. Benefits & Key Features of Immediate Annuity Plans:

    • One-time Investment: Requires only a lump sum amount, simplifying the investment process.

    • Flexible Purchase Price: No limit on the purchase price, providing freedom in investment amount.

    • Predictable Income: Offers a reliable and steady income stream, helping in financial planning.

    • Immediate Income: Starts delivering monthly income almost instantly, ensuring quick returns.

    • Customizable Durations: Flexibility in choosing plan duration, starting from 5 years, catering to varied needs.

    • Retirement Security: Provides peace of mind and stability for retirement planning.

    • Customised Options: These options come in various forms, like single-life and joint-life, allowing customization as per individual needs.

  2. Drawbacks of Immediate Annuity Plans:

    • Locked Investment: The purchase price remains fixed, limiting adjustments in the future.

    • Potential Fee Impact: Commission or fees can reduce monthly income, affecting overall returns.

    • Interest Rate Dependency: Monthly income is influenced by prevailing interest rates, impacting payouts.

fd return beater

What is a Fixed Deposit in India?

A Fixed Deposit (FD) is a popular savings option in India. It works like a secure agreement with a bank or post office. You deposit a lump sum amount for a fixed period, ranging from 7 days to 10 years. During this time, you earn a guaranteed interest rate on your deposit, which is locked in when opening the FD. This means your returns are not affected by market fluctuations, unlike stocks or mutual funds.  The interest can be paid out monthly, quarterly, or even reinvested to grow your earnings further through compounding. FDs are known for their safety and predictable returns, making them ideal for risk-averse investors or those saving for specific short-term goals.

  1. Benefits and Key Features of Fixed Deposits:

    • Low-risk retirement option for retirees.

    • Ideal for capital preservation and stable returns.

    • Fixed interest rates throughout the tenure.

    • Flexibility in choosing tenures and interest payout frequencies.

    • Shielded from external impacts like market fluctuations.

    • Renewal option available post-maturity for continuity.

  2. Potential Drawbacks of Fixed Deposits:

    • Fixed returns unaffected by market interest rate increases.

    • Tax obligations on earned interest, regardless of withdrawal.

    • Minimum investment requirement limits accessibility.

Difference Between an Annuity Plan and a Fixed Deposit

Parameter Immediate Annuity Plan Fixed Deposits
Investment amount Flexible with no limit The deposit amount is fixed
Liquidity Monthly payouts Payout: When the tenure is over
Tenure Period Flexible Flexible
Early Withdrawal Flexible options available Available but might incur penalties, fines, etc.
Tax* Applicable on payout Applicable on interest earned
Risk on Investment It could result in significant fees or commissions, reducing the overall income. Fluctuations in interest rates won't lead to higher returns since the interest rate remains fixed.

*Note: as per prevailing Income Tax laws 

Who Should Choose Immediate Annuity Plans?

Immediate annuities are ideal for retirees or those nearing retirement who prioritize:

  • Guaranteed income: Receive steady payouts right away to cover your living expenses.

  • Security: Lock in a predictable income stream regardless of market fluctuations.

FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

Who Should Choose Fixed Deposits?

Fixed deposits (FDs) are a good fit for investors seeking:

  • Safety: Backed by banks, FDs offer low risk and ensure your principal amount is protected.

  • Predictability: Fixed interest rates provide guaranteed returns and stable growth.

  • Flexibility: FDs come in various tenures to suit your goals, short-term or long-term.

  • Easy Access: Access your funds more easily than long-term investments.

Conclusion

Fixed Deposits (FDs) and Immediate Annuity Plans offer security and income but meet different needs. Consider your financial goals, risk tolerance, and desired income stream when choosing between these options. You might explore a balanced approach, including FDs and an Immediate Annuity Plan, to create a diversified and secure financial future.

Allahabad Bank FD Interest Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

DBS Bank FD Interest Rates

DBS Bank FD Interest Rates

Dena Bank FD Interest Rates

Dena Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Muthoot Capital

Nainital Bank FD Interest Rates

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Yes Bank FD Interest Rates

Expand

FAQs

  • Is pension plan better than FD?

    FDs offer guaranteed returns and easy access to funds but may not beat inflation. Annuities provide a steady income stream but have limited access to the principal amount. You can choose FDs for short-term goals and easy access annuities for guaranteed lifetime income.
  • What are the disadvantages of immediate annuities?

    • Lower overall return compared to some investments.

    • Limited access to your principal amount after purchase.

    • May not keep pace with inflation if not adjusted.

  • Is immediate annuity good?

    Yes, if you prioritize a guaranteed income stream throughout your retirement and are comfortable with limited access to the principal amount.
  • Which is better: immediate annuity or deferred annuity?

    Immediate annuities provide income right away. Deferred annuities grow tax-deferred until you withdraw, offering potentially higher returns but delaying income. Choose immediate annuities for current income, deferred for future growth.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
+ Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
#Discount offered by insurance company
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

FD Calculator

Total Investment

₹500 ₹30L
Enter Total Investment

Rate of Interest (Yearly)

1% 15%
Rate of Interest (Yearly)

Time Period

1 Year 15 Years
Enter Time Period
Interest Earned
Maturity Amount

FD Rates articles

Recent Articles
Popular Articles
BOI FCNR (B)

10 Jul 2024

BOI FCNR (B) Deposits, also known as Foreign Currency
Read more
BOI NRE Term Deposit Account

10 Jul 2024

BOI NRE Term Deposit Account is a fixed deposit account offered
Read more
BOI RFC Term Deposit

10 Jul 2024

BOI RFC Term Deposit is a fixed deposit account offered by the
Read more
BOI NRO Term Deposit Account

10 Jul 2024

BOI NRO Term Deposit Account is a fixed deposit account offered
Read more
BOI Current Deposits Plus Scheme

10 Jun 2024

The BOI Current Deposits Plus Scheme is a unique option for
Read more
Application for Withdrawal of Fixed Deposit
  • 03 Dec 2021
  • 22739
Fixed Deposits are the safest investment instruments. You invest the amount of your choice as the fixed deposit
Read more
Which Bank has the Highest Interest Rate for Fixed Deposit?
  • 23 Jul 2018
  • 211340
The Small Finance Banks offer the highest FD interest rates for a tenure between 7 days to 10 years. Unity Small
Read more
SBI Fixed Deposit Monthly Income Scheme
  • 04 Apr 2022
  • 12224
Fixed deposits are the safest investment vehicles for Indian financial planners. You can open a fixed deposit
Read more
SBI Fixed Deposit Double Scheme
  • 18 Feb 2022
  • 12452
The SBI Fixed Deposit Double Scheme is named Special Term Deposit to cater to investors looking to double their
Read more
Nominee Vs Legal Heirs for Fixed Deposits
  • 21 Dec 2023
  • 3129
Fixed deposits are a popular investment option for individuals who wish to earn a stable rate of interest on
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL