India’s largest public sector lender State Bank of India offers an annuity deposit scheme to enable the depositor to pay a one-time lump sum amount and receive the same in Equated Monthly Instalments (EMIs), comprising a part of the principal amount as well as interest on the reducing principal amount, compounded at quarterly rests and discounted to the monthly value. Simply, if you deposit an amount under the SBI Annuity Deposit scheme, you will get a monthly annuity that will consist of a part of the principal amount as well as interest earned on it.
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SBI Annuity Deposit Scheme Features:
The deposits under the scheme can be made for 36/60/84 or 120 months. The minimum monthly annuity under the scheme is Rs 1000 and premature payment is allowed for deposits up to Rs 15,00,000. There is no upper cap on the deposit amount. The investors also get an option to have an overdraft/loan up to 75% of the balance amount of the annuity as granted in special cases.
SBI Annuity Deposit Scheme Interest Rate:
The rate of interest is the same as applicable to Term Deposits for Public and Senior Citizens. It may be recalled that the SBI has recently hiked its fixed deposit rates and now offers a maximum of 6.1 per cent return for the general public and 6.9 per cent for senior citizens. Since deposits are allowed for four tenures in this scheme, the interest rate will vary from tenure to tenure. If you make a deposit for 36 months, you will earn an interest of 6.25 per cent, the deposits for 60 months period will earn an interest of 6.10 per cent for the general public and 6.5 per cent for senior citizens and the deposits for 84 months and 120 months tenure will earn an interest of 6.1 per cent for the general public and 6.9 per cent for senior citizens.
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Premature closure is Permitted in case of the death of the depositor. Premature payment is also allowed for deposits up to Rs 15 lacs.
