SBI annuity scheme offers its customers monthly returns against their one-time lump sum deposit. The monthly returns include both principal and interest amounts.
The interest is given on the reducing principal amount, compounded at quarterly rests and discounted to the monthly value.
How is this different from any other SBI Fixed Deposit Schemes?
The main difference is the disbursal of the maturity amount.
In FD, you make a one-time deposit and get one-time maturity after a fixed tenure. In the Annuity scheme, the amount is repaid over the tenure chosen by you, along with interest, in monthly installments.
Let's look at some feature highlights of the SBI Annuity Scheme
Depending on the tenure chosen by a depositor, they are given the same interest rate as offered to any term depositors
Interest Rates
The Scheme grants an overdraft/loan facility of up to 75% of the balance amount of the annuity on special cases.
Overdraft Facility
The scheme does not have a bar on the maximum deposit amount however 25,000 is the minimum deposit amount.
Minimum & Maximum Deposit
Premature payment is allowed up to Rs.15 lakh with a penalty. In case of the depositor’s death, there is no limit on the withdrawal amount.
Premature Payment:
Interest will be subject to TDS. The interest amount calculation is rounded off to the lowest rupee value, due to this there can be variation in the last annuity installment.
Taxes on Interests Earned
The annuity payments start a month later, from the date of deposit. If the date is non-existent (29th, 30th, and 31st), it will be paid on the 1st day of next month.