Annuity Deposit Scheme in SBI
Annuity Deposit Scheme in SBI: It pays back the principal along with interest every month
Do you want to deposit a large amount once and get monthly income? But this is the best scheme for you. State Bank of India, the country's largest lender, offers you an amazing scheme.
SBI Annuity Deposit Scheme. In this scheme you can deposit a large amount at once and get monthly income. Now let's see the complete details of this scheme.
Most people go with a solid plan on their financial resources. Pay a large amount of money. They turn to outside interests. It is considered that income will come if interest is charged every month. But they are not that safe. With the same bank you are assured of safety. For that SBI has introduced Annuity Deposit Scheme. In this scheme you deposit a large amount at once. The bank will also give you interest on it. Along with that interest, some amount of principal will be given to you every month. That means it is a kind of account that you have given a loan to the bank. Any Indian citizen can start this scheme. Minors also have a chance. NRE and NRO category can also invest in it.
Annuity Deposit Scheme in SBI Highlights
The interest rate on this scheme is the same as the interest rate on term deposits. SBI has recently increased the interest rate on its fixed deposits. General investors are getting 6.1 percent interest and senior citizens are getting 6.9 percent interest. In this scheme, deposits can be made in four tenures. So different interest rates are applicable for different tenures.
Unlike Fixed Deposit.. Annuity Deposit Scheme in SBI
Annuity deposit scheme is not like fixed deposit. Totally different. The depositor has to deposit the money once in the FD account. After maturity the principal and interest amount should be received at once. However, in annuity deposit you have to make a lump sum deposit. The bank will repay you within the time frame you decide. It will be given to you in installments along with principal and interest. That is, on the one-time payment you make in this scheme, the bank will give you back every month in the form of EMI. Due to this, your principal amount will decrease. At maturity your amount will be zero.
See this example.. Annuity Deposit Scheme in SBI
A depositor Rs. Suppose he invests 5 lakhs in SBI annuity scheme. Let's say that it is also fixed for a period of five years. For example, if the interest rate is 6.5 percent, the depositor will get Rs. 9,750 as a fixed income. In which Rs. 2,710 as interest and the rest from the principal. In this way every month you will be given up to five years. In the end, your money will be given with interest.
Who can use the Annuity Deposit Scheme in SBI Scheme?
The SBI ADS is available to both individuals and non-individuals, including trusts, societies, and companies. There is no minimum age limit to open an ADS account, but the deposit amount must be sufficient to generate a minimum monthly annuity of Rs. 1,000.
Benefits of using the annuity deposit scheme in SBI
Regular income stream: The ADS provides a fixed and regular income stream, which can be helpful for retirees or those who need a predictable source of funds.
Safe and secure investment: SBI is a reputable and government-owned bank, so your investment is safe and secure.
Interest earned on the principal amount: The interest earned on your principal amount is compounded, which means you earn interest on the interest you have already earned.
Flexible tenure options: The ADS is available for tenure options of 3, 5, 7, and 10 years.
Nomination facility: You can nominate a person to receive the annuity payments after your demise.
How to open an Annuity Deposit Scheme in SBI account
To open an SBI ADS account, you can visit any SBI branch with the following documents:
- Identity proof: PAN card, Aadhaar card, or voter's ID
- Address proof: Passport, driving license, or utility bill
- Two passport-size photographs
- Annuity Deposit Scheme in SBI application form
Once you have submitted the required documents and completed the application form, you will be required to deposit the lump sum amount. The annuity payments will start on the anniversary date of the deposit month.
Interest rates for Annuity Deposit Scheme in SBI
The interest rates for the SBI ADS are the same as the interest rates for SBI term deposits of the same period. For example, as of November 15, 2023, the interest rate for a 3-year term deposit is 7.00%, and the interest rate for a 5-year term deposit is 6.50%.
Additional information
- The ADS is not transferable to another bank.
- You can prematurely close the ADS account, but you will have to pay a penalty.
- The interest earned on the ADS is taxable as per your income tax slab.
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