SBI Annuity Deposit Scheme

The State Bank of India is a multinational public sector bank that offers various schemes and plans for its customers. One of the financial schemes offered is the SBI Annuity Deposit Scheme. The annuity deposit scheme is suited for those individuals who are keenly looking forward to obtaining a fixed monthly income by depositing a lump sum amount in the bank account.

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What is the SBI Annuity Deposit Scheme?

The SBI Annuity Deposit Scheme is a program offered by SBI that allows you to invest a lump sum of money upfront and receive regular monthly payouts over a fixed period. These monthly payments are called annuities, and they combine a portion of your principal amount along with interest earned on the reduced balance. The interest compounds quarterly but is paid out monthly. You can choose a term of three, five, seven, or ten years for the scheme.

Here's a breakdown of how it works:

  • You deposit a lump sum of one time with SBI.

  • SBI pays you back in fixed monthly instalments over your chosen tenure.

  • Each instalment combines the principal amount and interest.

  • The interest compounds quarterly but is paid out monthly.

  • You can choose a deposit term of 3, 5, 7, or 10 years.

Features of the SBI Annuity Deposit Scheme

Features of the SBI Annuity Deposit Scheme are:

  • Accessible throughout India: Invest from any SBI branch in the country.

  • Minimum Investment: Start with a small amount of Rs. 1,000.

  • No Upper Limit: Invest any amount you like, there's no maximum cap.

  • Regular Income: Earn monthly payouts that combine your principal amount and interest earned.

  • Flexible Terms: Choose your deposit tenure from 3, 5, 7, or 10 years.

  • Convenient Payment Dates: Receive payouts on the anniversary of your deposit month or the 1st of the following month if the date doesn't exist.

  • Universal Passbook: Track your annuity and term deposit investments in one place.

  • Nomination Facility: Appoint a beneficiary to receive your returns in case of your absence.

  • Overdraft/Loan Facility (Subject to Approval): The bank may grant an overdraft or loan for up to 75% of your deposit balance in special circumstances.

  • Premature Withdrawal (up to Rs. 15 Lakhs): Access your funds before maturity, but a penalty fee may apply.

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What are the Components Of The SBI Annuity Scheme?

The SBI Annuity Scheme comprises several key components that investors should be aware of:

  • Interest Rate: The interest rates under this scheme are determined based on the chosen investment tenure. Each percentage point in this annuity scheme is divided into ten parts, known as basis points.

  • Eligibility: Indian residents, including minors, can invest in the SBI Annuity Scheme. However, non-resident Indians (NRIs) cannot participate in this scheme.

  • Taxation: Investors are subject to TDS (Tax Deducted at Source) charges on the returns earned from the SBI Annuity Deposit Scheme. The bank rounds off the interest to the nearest rupee, potentially affecting the final annuity instalment.

  • Premature Payment: In the unfortunate event of the investor's demise during the tenure, premature payment of instalments is permitted. The legal heirs or joint account holders can receive the scheme's returns after the investor's death.

  • Maturity Amount: The scheme pays out principal and interest based on the reduced principal amount over time, ultimately resulting in a maturity amount of zero at the end of the maturity period.

Eligibility Criteria Under The SBI Annuity Scheme

  • Anyone who is looking to invest in an SBI annuity scheme should be a resident individual, which could also include a minor. 

  • The mode of holding could be joint or single.

  • Any customer falling into the category of NRE and NRO cannot access this facility.

SBI Annuity Deposit Scheme Interest Rates 2024

Tenor General Public (%) Senior Citizen (%)
7 days to 45 days 3.50 4.00
46 days to 179 days 4.75 5.25
180 days to 210 days 5.75 6.25
211 days to less than 1 year 6.00 6.50
1 Year to less than 2 years 6.80 7.30
2 years to less than 3 years 7.00 7.50
3 years to less than 5 years 6.75 7.25
5 years and up to 10 years 6.50 7.50
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Benefits of the SBI Annuity Deposit Scheme

Below are the benefits of the SBI Annuity Deposit Scheme: 

  • Competitive Interest Rates: The scheme offers interest rates comparable to SBI's term deposits, providing investors with a reliable and stable source of income.

  • Flexibility in Interest Rates: Investors can choose from different interest rates based on their investment tenure, allowing them to tailor their investment strategy to their financial goals.

  • Additional Benefits for Senior Citizens: Senior citizen investors receive an extra interest rate, enhancing their returns and providing a cushion against inflation.

  • Insurance Coverage: In the unfortunate event of the depositor's death, the bank will make the full payment in advance, ensuring that the depositor's family or beneficiaries receive the entire amount without any hassle.

  • Loan Facility: Depositors can avail themselves of the loan facility for up to 75% of their total deposit amount, providing them with liquidity and financial flexibility when needed.

  • No Maximum Deposit Limit: There is no upper limit on the amount that can be deposited under the SBI Annuity Deposit Scheme, allowing investors to invest according to their financial capacity and goals.

How is the SBI Annuity Deposit Calculated?

The State Bank of India uses the formula provided below to

The SBI Annuity Deposit Calculate following formula
A = P (1+r/n) ^ (n * t)
Here is the formula for SBI Annuity Deposit monthly income:
A
stands for Maturity amount
P
stands for Principal amount
r
stands for Rate of interest
n
stands for number of times the interest will compound in a year
t
stands for Total tenure

SBI Annuity Deposit Scheme Calculator 2024

If you're considering investing in the SBI Annuity Deposit Scheme, it's important to calculate your expected returns beforehand. While manual calculations using the compound interest formula are possible, they can be time-consuming and prone to errors.

To streamline this process and save time and effort, you can use an online calculator specifically designed for the SBI Annuity Deposit Scheme. The SBI Annuity Deposit Calculator is readily available online and is free to use. By inputting the relevant values, you can obtain accurate and instant results, allowing you to explore various investment scenarios and select the right investment amount that aligns with your financial goals.

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Conclusion

The SBI Annuity Deposit Scheme is a well-rounded option for individuals seeking a steady stream of income.  With its accessible investment requirements, flexible terms, and nomination facility, it tries to meet various financial goals. Whether you're planning for retirement or simply want to create a predictable income source, the SBI Annuity Deposit Scheme offers a secure and convenient solution.

Frequently Asked Questions

  • Is the SBI annuity deposit scheme different from an FD scheme?

    With an FD account, you need to make an initial deposit and receive both the principal and interest at maturity. Annuity deposits require a one-time deposit from the customer, with the amount plus interest returned over the chosen predetermined tenure.
  • How does an annuity deposit differ from an RD account?

    In an RD account, customers make periodic payments and receive the maturity amount at the end. With annuity deposits, customers make a single deposit, and the amount, along with interest, is returned in instalments over the predetermined period.
  • Can I make an early money withdrawal with the SBI annuity deposit scheme?

    Usually, the bank does not allow early payments, except in cases of the depositor's death.
  • Is SBI annuity deposit different from the recurring deposit and fixed deposit account?

    Within a recurring deposit account, the payments made by the customers are done in instalments and the maturity sum is received at the maturity date. In case of SBI annuity scheme, the deposit is accepted as one time and that sum including the interest upon reducing the principal is then repaid in instalment to the customer over the selected period.
    When it comes to a fixed deposit account the customer makes the one-time deposit and obtains the maturity sum upon the maturity date that consists of interest and principal in case of STDR, however in case TDR principal is received as the interest is paid at the intervals periodically. On the other hand, an annuity deposit is only gone by one-time deposit and the sum is repaid to its customers over the selected term including the interest in EMI’s
  • What is the maturity amount in the SBI annuity deposit?

    The maturity sum will remain zero because part of the principle and interest upon the reducing principle over a period will be paid in instalment at the maturity date
  • What are the minimum and maximum limits for SBI annuity deposit?

    The minimum deposit sum for the monthly annuity is Rs. 1,000 for 3 years, which makes the minimum deposit amount Rs. 36,000. The limit for the maximum sum via internet banking will be the equivalent as applicable for the transfer of funds.
  • What is the minimum and maximum period of deposit?

    The SBI annuity scheme is accessible for 1, 2, 3, 5, 7 and 10 years.
  • Can senior citizens avail additional rate of interest on SBI annuity deposit?

    Yes, the senior citizen can easily access the additional interest rate
  • What is the rate of interest on SBI annuity deposit scheme?

    It will apply to the tenor of the term deposits as chosen by the depositor.
  • Can I set the maturity instructions for an annuity deposit account?

    No, the maturity instructions are not at all applicable.
  • How to add nominees?

    When opening an SBI annuity deposit account, you will be offered with an alternative wherein the nominee can be retained for the deposit account that is the account of debit from where it is essentially funded
  • Is it possible to close an annuity deposit account online?

    No, the premature payment is only allowed via branch and that too only when the depositor is no more.
  • Under whose name can SBI annuity deposit account be opened? Also, what would be the mode to operate?

    The name, branch and mode of operation of the recently generated annuity deposit account will be equivalent as in the debit account from where the account of annuity deposit is funded
  • Does an SBI annuity deposit scheme subject to the TDS?

    The interest payable will be liable to TDS for the annuity store. The interest sum computation is adjusted to the most reduced rupee esteem, because of this there can be variations in the last annuity portion
  • What are the Terms and Conditions for SBI Annuity Deposit Scheme?

    Listed below are the terms and conditions that one should be aware of:
    The penalty on premature is chargeable just like a term deposit.
    The premature closure is permissible only when the depositor passes way. Moreover, the premature payment is granted only when the deposit is up to Rs 15 lakh

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