Shedding Light On SBI Annuity Deposit Scheme
Published On Dec 12, 2021
Table of Contents
The SBI Annuity Deposit Scheme is a savings account that allows investors to receive a monthly income from their investments. An investor can make a lump-sum investment and get Equated Monthly Installments under this arrangement (EMI). Both principal and interest are included in the EMI. The interest is compounded quarterly and the monthly EMI amount is discounted. In addition, the interest rate shall follow SBI guidelines.
This plan is open to all residents, including children, who can invest through single or joint accounts. The minimum deposit amount must be at least INR 25,000. The maximum amount that may be invested in the SBI Annuity Deposit Scheme is unlimited. The available tenure options are 36, 60, 84, or 120 months, with 36, 60, 84, and 120 months being the most popular. Investors can also borrow money against their SBI annuity deposit programme. However, it is only allowed in exceptional circumstances. To find out more on SBI annuity deposit scheme, read on.
Features Of SBI Annuity Deposit Scheme
Following are some of the features of SBI annuity deposit scheme -
- Tenure Of Deposit - There are four specific tenures available for the scheme. The term of the investment might be 36, 60, 84, or 120 months.
- Minimum & Maximum Deposit - For the relevant period, the minimum deposit is INR 1,000 per month. The minimum deposit under the SBI Annuity Deposit Scheme for a 5-year term is INR 60,000. The maximum investment amount, however, is unrestricted.
- Interest Date - The scheme's interest rate will be comparable to SBI's term deposit interest rates. Senior Citizens might also earn a higher interest rate on their deposits.
- Account Opening - This scheme is open at all SBI locations. SBI offices provide investors the option of opening a single or joint account. At the time of account opening, SBI will provide a universal passbook.
- Annuity Payment - The annuity payments begin a month after the deposit date. If the due date falls on a non-existent day, such as the 31st or 30th, the payment will be processed on the first of the following month.
- Nomination Facility - Only investors have access to this feature.
- Overdraft or loan - Investors can borrow up to 75 percent of the annuity's balance. However, the loan will only be approved in exceptional circumstances. In addition, if the loan is approved, the following annuity payment will be transferred only into the loan account.
- Transferability - The SBI annuity account can be transferred freely across branches.
- Premature Withdrawal - Premature is only accessible if the investor dies before the account is closed, and only at the branch where the account is started.
Eligibility To Invest In SBI Annuity Deposit Scheme
The SBI Annuity Deposit Scheme is available to all residents, including minors. They can also establish a single or joint account at any SBI office nationwide. Customers who are NRE or NRO are also unable to open the SBI Annuity Deposit Scheme.
Is An Annuity Deposit Scheme Different From A Regular Deposit Scheme?
In a normal SBI fixed deposit scheme, investors pay the deposit amount in one single payment and get interest on a regular basis as well as the principal at maturity. Alternatively, investors might get both the principal and interest at the time of maturity. An annuity scheme requires the investor to pay a lump sum deposit in order to receive the principal and interest in equal monthly installments.
Is An Annuity Deposit Scheme Different From A Recurring Deposit Scheme?
Investors in an SBI recurring deposit programme make the deposit in monthly installments and get a lump payment at maturity. In the SBI Annuity Scheme, the investor invests a lump sum amount in order to receive monthly income (principal + interest) for a certain period of time.
Anyone who wants to use their money for monthly income assistance can choose an SBI annuity deposit programme. Within this system, the depositor just has to make a lump-sum deposit and get monthly income.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.