The State Bank of India (SBI) offers Annuity Deposit Scheme for people who want to get a fixed monthly income. Depositors can get monthly income from this scheme after making a one-time lump sum deposit. This scheme is ideal for people who want to use their savings for monthly income support.
The official website of SBI states that a fixed amount is provided to the depositor in equated monthly installments (EMIs), which consists of the principal amount along with the interest. Hence, the deposits made by the account holder are returned to them in the form of a monthly installment, with the interest. The bank starts paying the interest to the account holder on the same date the account was opened starting from the next month. For instance, if you have opened the account on the 27th of February, the interest payment from the bank will start from the 27th of March.
Here are a few things for you to know before you start your deposit with this annuity scheme:
Deposit amount – Even though there is no maximum limit, account holders need to make a deposit of minimum Rs 25,000 in the SBI annuity deposit scheme.
Tenure – This deposit scheme comes with various maturity options, and depositors can choose from tenures ranging from 3 years to 5 years, 7 years and 10 years.
Rate of interest – The rate of interest applicable to this scheme is similar to what is offered on term/fixed deposits, which depends on the tenure opted by the depositor. According to the latest revised FD rates, SBI offers 6 per cent interest on deposits maturing in 1 year to 10 years. So, for 36 months, 60 months, 84 months or 120 months, the SBI annuity deposit scheme will fetch you an interest rate of 6 per cent. For 6 months to less than 1 year, depositors will get an interest rate of 5.5 per cent. Senior citizens for a tenure of 1 year and up to 10 years will get an interest rate of 6.50 per cent.
Premature Payment – According to the SBI official website, premature payment under the SBI annuity deposit scheme is only allowed in case of the death of the depositor.
Other facilities – Among other facilities, depositors get a nomination facility with this scheme. As a depositor, you also get an overdraft or loan facility of up to 75 per cent of the balance amount of annuity. Once the loan amount has been disbursed, further annuity payment is deposited in the loan account.