Fixed deposits are the safest investment vehicles for Indian financial planners. You can open a fixed deposit account in any commercial bank or the Post Office without any deposit limit for 7 days to 10 years. In return, banks pay you interest for the investment period with compounding benefits. In addition, you can ask for interest payment periodically or on maturity, depending on the chosen scheme. However, SBI Fixed Deposit Monthly Income Scheme differs from the traditional FD Schemes.Read more
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Let us take a closer look at its various elements.
The unique SBI Annuity Deposit Scheme provides a monthly payout in instalments during the contracted tenure of various lengths. SBI’s monthly payout fundamentally differs from other banks because it has fixed EMI comprising both the partial reducing principal and interest components.
However, the interest paid is compounded quarterly and discounted monthly. In contrast, other banks pay the accrued interest every month, and the principal remains untouched.
As we understand, the scheme is unique within the traditional fixed deposit genre. Let us learn about its critical features.
You must deposit a lump sum amount to subscribe to the scheme.
The scheme permits fixed tenures of 36, 60, 84, and 120 months.
The minimum deposit is based on a minimum monthly annuity EMI of Rs.1000 for the chosen period. Thus, you have to deposit Rs.36000 to earn the minimum annuity. However, there is no upper investment limit in the Annuity Deposit Scheme.
You are allowed premature withdrawals up to a maximum deposit of Rs.15 Lac. However, charges are recovered per the term deposit governing rules.
The applicable interest rate is the same for domestic term deposits for matching tenures.
An annuity is paid on the anniversary date of the following month when booking the deposit. However, the first of the following month is the payment date for a non-existing date.
You can avail of a loan or an OD facility up to 75% of the remaining principal balance. However, the EMIs are then credited to the loan or OD account, as the case may be.
A nomination facility is available under the scheme.
You are not given a term deposit receipt but a passbook for investing in the scheme.
SBI Annuity Deposit Scheme is open for subscription like any other term deposit in the bank. You can open the account if you are a resident Indian individual. Minor account represented by a guardian is also permitted.
You can operate the account singly or jointly. However, the operational instructions must match the account from where the deposit is funded.
You have already understood that the interest rate applied in the Annuity Deposit Scheme is the same defined for domestic term deposits.
Here are current applicable rates of the SBI Annuity Deposit scheme:
|SBI Domestic Term Deposit Rates for Rs 2 Cr and less|
|Tenors||General Public (%)||Senior Citizens (%)|
|Existing: effective from 08/01/2022|
|Revised: effective from 15/01/2022|
Note: Interest rates are subject to change. Please confirm with your bank before investing.
The SBI staff earns a preferential rate of 1% above the card rates. In addition, retirees are further benefited, earning the additional staff rate plus the senior citizen rate depending on the chosen tenure. You must understand that the monthly annuity payable is rounded to the nearest higher rupee.
Let us explore the critical benefits that come your way for subscribing to it:
You can adapt to the scheme parameters aligned to your financial capabilities without any upper limit for the subscription.
The scheme walks the extra mile for your steady income need over the tenure of your choice. Accordingly, the scheme is tailor-made for individuals who can make the best of lump-sum deposits to supplement their monthly income.
While opening the account is hassle-free, the account is liquid with an option to close prematurely with an exit load of 1% as a penalty.
Monthly income fixed deposits are ideal for the retired, providing financial independence during their twilight years lacking a regular income source.
According to the laws under the Income Tax Act, 1961, interest income on bank deposits is taxable. Let us take a closer look at the provisions:
Banks deduct TDS if your annual interest income exceeds Rs.40000. However, the exemption limit is Rs 50,000 for senior citizens.
TDS is deducted at 10% of the earned interest if your PAN card is registered with the bank.
However, the TDS is 20% if you fail to register your PAN card.
TDS is deducted at applicable rates whenever the banks apply interest to the deposit after the exemption limits have been exceeded.
Subscribing to the account is hassle-free and accomplished in a few steps. The prerequisite is that you must be an existing SBI customer. You can fill up the application form with a request to debit your operational savings, current, or OD account with them.
However, the account should not be dormant and open for transactions through the internet banking channel.
You can open the Annuity Deposit Scheme at any SBI branch and is transferable across the country. Submit the following documents:
Completed and duly signed application form
KYC documents for identification and address verification
Recent photograph copies
You must remember that the operation instruction in the proposed account should match the debited account.
SBI Annuity Deposit Scheme offers a unique opportunity to plan your finances in one of the safest investment vehicles in medium and long-term horizons. You can augment your monthly income from traditional fixed deposits. The annuity is paid in EMIs using a part of the invested principal and the accrued interest to inflate the payout.
|FD Interest Rates|
|SBI FD Interest Rates||HDFC FD Interest Rates|
|ICICI FD Interest Rates||Axis Bank FD Interest Rates|
|Canara FD Interest Rates||Yes Bank FD Interest Rates|
|Kotak Mahindra FD Interest Rates||Bandhan Bank FD Interest Rates|
|Union Bank of India FD Interest Rates||Indusind Bank FD Interest Rates|
|PNB FD Interest Rates||Bank of Baroda FD Interest Rates|
|IDFC Bank FD Interest Rates||Indian Bank FD Interest Rates|
|RBL Bank FD Interest Rates||UCO Bank FD Interest Rates|
|Karnatka Bank FD Interest Rates||Bank of India FD Interest Rates|
|IDBI Bank FD Interest Rates||Central Bank of India FD Interest Rates|
|Bank of Maharashtra FD Interest Rates||Citi Bank FD Interest Rates|
|Allahabad Bank FD Interest Rates||Indian Overseas Bank FD Interest Rates|
|Andhra Bank FD Interest Rates||Corporation Bank FD Interest Rates|
|DBS Bank FD Interest Rates||Syndicate Bank FD Interest Rates|
|Dena Bank FD Interest Rates||Vijaya Bank FD Interest Rates|
|State Bank of Travancore FD Interest Rates||State Bank of Mysore FD Interest Rates|
|State Bank of Hyderabad FD Interest Rates|
*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
+Returns Since Inception of LIC Growth Fund
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