Most people desire a regular and steady stream of income after retirement as it makes it easier for them to lead their lives. SBI Annuity Deposit Scheme is a special scheme offered by the bank to individuals, especially senior citizens who are looking for a stable source of income.
Unlike other fixed-income products which make periodic payments of the interest amount only, the SBI Annuity Deposit scheme provides a part of the principal amount along with the applicable interest amount over a tenure.
In this blog, we will explore some important details regarding an SBI Annuity Deposit Scheme. Before we dive into more details, we will start by checking the applicable interest rates in 2023.
SBI Annuity Deposit Scheme Interest Rates 2023
Here are SBI Annuity Deposit scheme interest rates for investments below ₹2 crores.
| Tenure | Interest Rates for General Citizens | Interest Rates for Senior Citizens |
| 7 days to 45 days | 3.00% | 3.50% |
| 46 days to 179 days | 4.50% | 5.00% |
| 180 days to 210 days | 5.25% | 5.75% |
| 211 days to less than 1 year | 5.75% | 6.25% |
| 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 | 6.50% | 7.00% |
| 5 years to 10 years | 6.50% | 7.50% |
Listed below are the interest rates for deposits above ₹2 crores.
| Tenure | Interest Rates for General Public | Interest Rates for Senior Citizens |
| 7 days to 45 days | 4.75% | 5.25% |
| 46 days to 179 days | 5.50% | 6.00% |
| 180 days to 210 days | 6.00% | 6.50% |
| 211 days to less than a year | 6.25% | 6.75% |
| 1 year to less than 2 years | 6.75% | 7.25% |
| 2 years to less than 3 years | 6.50% | 7.00% |
| 3 years to less than 5 years | 6.00% | 6.50% |
| 5 years to 10 years | 6.00% | 6.50% |
Features of the SBI Annuity Deposit Scheme
In this section, we will explore some of the features of the SBI Annuity Deposit scheme.
- It enables depositors to invest a lump-sum amount at one time and receive a repayment of their investment through monthly annuity instalments comprising a portion of the principal amount along with interest.
- The deposit period can be 36 months, 60 months, 84 months or even 120 months.
- This Annuity Deposit Scheme is available in all branches across India. Another noteworthy feature is that the investment made in this scheme is transferable among all SBI bank branches.
- The deposit amount depends on a minimum monthly annuity of ₹1,000. However, there is no maximum deposit amount.
- The bank allows premature payments of your investment up to the amount of ₹15,00,000. However, a penalty is chargeable as per the applicable terms and conditions upon applying for this premature facility.
- There is no limit on premature payment in case a depositor passes away before maturity.
- Under a SBI Annuity Deposit scheme, one can choose individuals as their nominees only.
- The SBI Annuity scheme comes with a Universal Passbook issued to all depositors.
Benefits of the SBI Annuity Deposit Scheme
Let’s explore the benefits of the SBI Annuity Deposit Scheme:
1. Investment Period
Depositors get a wide range of options when it comes to investment tenure of the SBI Annuity Deposit scheme. They can invest in this scheme for up to 10 years depending on their financial requirements.
- No Upper Limit
- There is no upper limit on deposits made under the SBI Annuity Deposit scheme. This feature makes it an attractive investment option for high-net-worth individuals.
- Mode of Payment
- SBI Annuity Deposit scheme is a steady source of income for depositors which is another notable benefit. In case a depositor passes away, the nominee can receive the entire payment well in advance.
- Loan Opportunity
- A significant benefit is that depositors can apply for a loan against the SBI Annuity Deposit scheme. It helps them to deal with financial emergencies.
Eligibility for SBI Annuity Deposit Scheme
Make sure you are aware of the eligibility criteria of the SBI Annuity Deposit scheme:
- Resident individuals, including minors, can open an account under the SBI Annuity Deposit scheme.
- Depositors can open this account either individually or jointly with other individuals.
- Non-resident Indians (NRIs), including NRE and NRO account holders, are not eligible for the SBI Annuity Deposit Scheme.
Components of the SBI Annuity Deposit Scheme
This section will focus on the components of the SBI Annuity Deposit scheme:
- Premature Payment
The bank allows nominees or legal heirs to prematurely withdraw the entire deposit amount in case of a depositor’s death.
- Taxation
The SBI Annuity Deposit scheme is subject to TDS (Tax Deducted at Source). The interest amount remaining after the deductions gets rounded off to the next rupee value, resulting in different instalment values.
- Facility for loan
In case of financial emergencies, depositors can avail a loan/overdraft facility for up to 75% of the total balance amount. In that case, the annuity payment gets transferred to a depositor’s loan account.
- Interest rates
SBI Annuity Deposit scheme is designed with attractive interest rates, similar to domestic term deposits offered by the bank. Note that one-tenth of the percentage point will be equal to one-basis point.
- Maturity amount
A depositor receives both the principal and interest on lowering the principal in instalments over a predetermined tenure. That is why, there is no amount to be received on maturity.
- Eligibility
Every resident Indian, including minors, is eligible to invest in the SBI Annuity Deposit Scheme.
Conclusion
SBI Annuity Deposit Scheme is a regular income product offered by the State Bank of India. The scheme is an ideal investment avenue for senior citizens, offering stable and assured returns. Besides, depositors can address a crisis at hand by availing its other benefits such as overdraft and nomination facilities in return for a one-time lump-sum payment.
Although a safe option, it is in the best interest of all depositors to verify the interest rates and go through the associated terms and conditions before applying for the scheme. This can be done either by visiting the official website of SBI or consulting a bank representative.
FAQs
Yes, you can easily debit money from your savings, current or OD accounts to open an account under this SBI annuity scheme.
The minimum deposit amount required to book a SBI Annuity Deposit is ₹36,000. However, there’s no upper limit on the amount you can invest.
When an individual opens a recurring deposit account, he/she deposits the investment amount in instalments and receives the entire maturity amount at the end of the tenure. In the case of an Annuity deposit, an individual makes a one-time lump-sum deposit in order to receive the principal amount along with interest in instalments throughout the tenure.
No, you cannot set maturity instructions for the SBI Annuity Deposit scheme.
