SBI or State Bank of India's annuity deposit scheme works like a fixed deposit (FD) scheme. The annuity deposit scheme enables a person to pay a one-time lump sum amount and receive a part of the principal amount along with interest on the reducing principal amount in equated monthly instalments (EMIs), according to the bank's corporate website - sbi.co.in. In other words, the deposit made in the SBI annuity scheme is returned to the customer with interest in monthly payments by the bank. The amount is compounded at quarterly intervals, according to the SBI portal.
Here are five things to know about SBI's annuity deposit scheme:
1. Amount: Customers are required to deposit a minimum Rs. 25,000. However, there is no maximum limit of deposit amount for SBI's annuity deposit scheme.
2. Term: Maturity options of 36 months, 60 months, 84 months and 120 months (3 years, 5 years, 7 years or 10 years) are available under SBI's annuity deposit scheme.
3. Rate of Interest: The rate of interest is same as applicable to the fixed deposit account of the term opted by the person. The following FD interest rates are for deposits below Rs. 2 crore from May 9, 2019, according to sbi.co.in:
|Period||General public (% p.a.)||Senior citizens (% p.a.)|
|3 years to less than 5 years||6.7||7.2|
|5 years and up to 10 years||6.6||7.1|
4. Premature withdrawal: Under the annuity deposit scheme, a premature withdrawal is permitted only in case of death of the depositor, according to SBI.
5. Other facilities: Overdraft or loan up to 75 per cent of the balance amount of annuity can be granted on special cases, according to SBI's website. After disbursal of loan, further annuity payment is deposited in loan account only. SBI also offers a nomination facility with the scheme.