How to Get Monthly Income on a Single Deposit with SBI Annuity Deposit Scheme

In the face of rising interest rates, the country’s largest lender, State Bank of India (SBI), offers an investment product called the SBI Annuity Deposit Scheme, which requires investors to deposit a lump sum and earn monthly annuity instalments that include a portion of the principal as well as interest.

In the face of rising interest rates, the country’s largest lender, State Bank of India (SBI), offers an investment product called the SBI Annuity Deposit Scheme, which requires investors to deposit a lump sum and earn monthly annuity instalments that include a portion of the principal as well as interest.

Eligibility requirement

According to SBI’s official website, all residents, including minors, are able to apply for the plan via a single or combined manner. Customers who are NRO or NRE are not eligible for this product, although older people are eligible for a higher interest rate than the standard rate. According to SBI standards, one can apply for the SBI Annuity Program with a savings, current, or overdraft account. The account chosen for the scheme must be a valid functioning account with Internet Banking enabled, and it must not be suspended, dormant, or locked.

Maturity period and interest

The SBI Annuity Scheme is accessible at all SBI branches and has a 36-, 60-, 84-, or 120-month term. A minimum deposit amount for annuity deposit must be provided, which is based on a minimum monthly annuity of Rs. 1000 for the appropriate period, in order to establish an SBI Annuity Scheme with a maturity duration of 3 to 10 years. According to SBI guidelines, the maximum deposit limit for internet banking is the same as the maximum deposit limit for cash transfers within one’s own account, but there is no maximum deposit restriction for physical banking. The interest rate offered by the SBI Annuity Deposit Scheme will be the same as that offered by term deposits for the term selected by the account holder. The rate of interest applicable to SBI Term Deposits for the general public and older citizens will be offered on the SBI Annuity Scheme. On June 14, 2022, SBI raised interest rates on fixed deposits. On deposits expiring in 3 to 10 years, SBI now offers an interest rate of 5.45 percent to 5.50 percent to the general public and 5.95 percent to 6.30 percent to elderly persons. TDS will be charged on the interest paid on the Annuity deposit, and you must submit your PAN to avoid paying the TDS.

Premature withdrawal and overdraft facility

According to SBI’s terms and conditions, premature closure is permitted in the event of the depositor’s death, and early payout is permitted for deposits up to Rs. 15.00 lacs. Premature withdrawals incur the same penalty as early withdrawals from term deposits. According to SBI’s current premature closure guidelines, the applicable penalty for term deposits over 5.00 lacs will be 1% (all tenors), and a premature withdrawal amount of 1% below the rate applicable at the time of deposit will be provided to the depositor as a premature withdrawal amount for the period of deposit remaining with the bank. For exceptional circumstances such as education, marriage, or any other emergency, an overdraft/loan of up to 75 percent of the balance amount of the annuity might be provided. Annuity payments will be credited to the loan account only after the OD/loan has been released, according to SBI.