SBI Annuity Deposit Scheme- Features, Eligibility, All You Need to Know

In response to rising interest rates, the country's largest lender, State Bank of India (SBI), offers the SBI Annuity Deposit Scheme. The State Bank of India is a multinational public sector bank that provides a wide range of schemes and plans to its customers. The SBI Annuity Deposit Scheme is one of the many schemes offered by SBI. This annuity deposit scheme is ideal for individuals who want to receive a fixed monthly income by depositing a lump sum amount into a bank account. It is nothing more than an investment product in which investors must deposit a lump sum and can earn monthly annuity instalments that include a portion of the principal amount as interest.

What is an Annuity Deposit?

A customer deposits a lump sum amount, which is repaid to the customer over time in equated monthly instalments that include a portion of the principal amount as well as interest on the reducing principle amount. The scheme allows customers to receive a fixed monthly amount in exchange for a one-time deposit.

Features

• To allow the customer to deposit a one-time lump sum amount and receive re-payment in monthly annuity instalments that include a portion of the principal amount plus interest.
• Individuals have the option of 36/60/84 or 120 months.
• The interest rate is determined by the term deposit rate.
• For the relevant period, the deposit amount is based on a minimum monthly annuity of Rs 1000/-.
• Premature payment is permitted up to a maximum of Rs.15 lakes.Penalty applicable to Term Deposits. Premature payment is permitted without limit in the event of the depositor's death.
• In exceptional circumstances, an overdraft/loan of up to 75% of the annuity balance may be granted.
• Following the disbursement of the OD/loan, any additional annuity payments will be deposited only in the loan account.
• The Universal Passbook is issued in place of the Term Deposit Transferability permitted between branches.

Eligibility

Any individual who wishes to participate in an SBI annuity scheme must be at least 18 years old. The mode of ownership could be sole or joint. Any client who falls into the NRE or NRO category is ineligible to use the facility

Facility for Loan

In certain circumstances, the scheme allows for an overdraft or loan of up to 75% of the annuity balance amount. Following loan disbursement, periodic annuity payments will be deposited into the borrower's loan account.

Premature Payment

A premature payment is permitted under this scheme in the event of the depositor's death. To withdraw the deposit early by obtaining the consent of the deceased's legal heirs or joint account holders. The bank has the same right to follow the same rule.

What is the difference between an annuity deposit and a recurring deposit account?

In a recurring deposit account, the customer makes instalment payments and receives the maturity amount on the maturity date, whereas an annuity deposit accepts a one-time deposit and returns that amount, plus interest on the reducing principle, to the customer in instalments over the tenor chosen by him or her.

What is the difference between an annuity deposit and a fixed deposit account?

In a Fixed Deposit account, the customer makes a one-time deposit and receives the maturity amount at the maturity date, which includes principal and interest in the case of STDR and principal only in the case of TDR because interest is paid at regular intervals. Annuity Deposit accepts a one-time deposit, with the amount repaid to the customer over the tenor chosen by him or her.

FAQS

What is the maturity amount of an Annuity Deposit?

Because the principle and interest on reducing principle are paid in instalments over time in an annuity deposit, the maturity amount remains 0 at maturity (Zero).

What are the minimum and maximum Annuity Deposit limits?

The minimum deposit amount for Annuity deposit is based on the relevant period's minimum monthly annuity of Rs. 1000. For three years, the minimum deposit will be Rs. 36,000. The maximum amount limit for Internet Banking is the same as for Fund Transfer within own account (See Enquiries - > Transaction limit / Charges).

What is the minimum and maximum deposit period?

The Annuity deposit is available for three years, five years, seven years, and ten years.

What are the different types of accounts from which I can deduct money for the Annuity deposit?

You can open an Annuity deposit account by debiting a savings, current, or OD account. The account chosen for debiting must be a valid transactional account accessible via Internet Banking and must not be a stopped / dormant / locked account.