Country's largest lender State Bank of India (SBI) offers Annuity Deposit Scheme in which the customers can get a fixed amount every month after depositing a one-time lumpsum payment. As per SBI official website, a fixed amount is provided to the account holder in equated monthly instalments (EMIs). The EMIs comprises 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. So, the deposits made by the customers is returned to them in the form of monthly installment, along with interest. The bank says payment of interest will start on the anniversary date of the month following the month of deposit.
Here are five things to know about SBI Annuity Deposit Scheme
1) Deposit amount
Customers are required to deposit a minimum of ₹25,000 in SBI annuity deposit scheme:. However there is no maximum limit.
Maturity options of 3 years, 5 years, 7 years and 10 years are available under SBI annuity deposit scheme.
3) Rate of interest
The rate of interest is same as applicable to the term deposits/fixed deposits of tenure as opted by the depositor. After the latest revision in FD rates, SBI offers 6.25% interest on deposits maturing in 3 years to 10 years. So, for 36/60/84 or 120 months annuity deposit scheme, SBI will give 6.25% interest.
3 years to less than 5 years-6.25%
5 years and up to 10 years-6.25%
4) Premature Payment
SBI annuity deposit scheme allows premature payment only in case of death of depositor, according to the SBI official website.
5) Other facilities
SBI also offers nomination facility with the scheme. 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.