The SBI Annuity Deposit Scheme is designed for individuals who want a fixed monthly income after making a single lump sum deposit. This plan converts your investment into regular monthly payouts, which include both the interest earned and a portion of the principal. The interest rate offered is the same as SBI’s fixed deposit (FD) rate for the selected tenure, and interest is compounded quarterly on the reducing balance.
Any resident Indian can open an account under this scheme by visiting an SBI branch. It is especially useful for retirees, professionals, or anyone who prefers a predictable income stream instead of receiving a lump sum maturity amount.
Deposit Tenure Options
You can choose a deposit period of 36, 60, 84, or 120 months, giving flexibility to plan your income for 3 years up to 10 years. There is no maximum deposit limit, and the annuity amount depends on the lump sum invested. The minimum annuity payment starts from ₹1,000 per month.
Income Begins from Next Month
Once you deposit the amount, the first monthly payment begins in the following month on the fixed date chosen. A universal passbook is provided for account records, and the payments are directly credited to your linked savings or current account.
Benefits for Senior Citizens
Senior citizens enjoy an additional interest rate of 0.50% above the regular FD rate, which increases their monthly payouts. The account can be opened either individually or jointly, and tax is deducted at source (TDS) before crediting the monthly income.
Premature Withdrawal Rules
This scheme allows early withdrawal only if the deposit is up to ₹15 lakh. A penalty may apply as per FD rules. If the deposit amount is more than ₹15 lakh, premature withdrawal is permitted only for the portion up to ₹15 lakh. In case of the depositor’s death, the account can be closed early without penalty.
Loan and Overdraft Facility
The scheme also provides liquidity support. You can take a loan or overdraft against your deposit up to 75% of the account balance. However, once you avail of this facility, the monthly annuity payments will be credited to the loan account until repayment.
Key Features of SBI Annuity Deposit Scheme
| Feature | Details |
|---|---|
| Eligible Applicants | Any resident Indian |
| Minimum Annuity | ₹1,000 per month |
| Maximum Deposit | No limit |
| Tenure Options | 36, 60, 84, or 120 months |
| Interest Rate | Same as SBI FD (extra 0.50% for seniors) |
| Payment Start | Month following the deposit |
| Premature Withdrawal | Allowed up to ₹15 lakh with penalty |
| Loan/Overdraft | Up to 75% of balance |
| Nomination Facility | Available |
Final Verdict
The SBI Annuity Deposit Scheme is a practical choice for those who want stable and assured monthly income without market risk. It is particularly suitable for retirees and individuals looking for guaranteed earnings. However, since the returns are fixed and taxable, it may not match the inflation-adjusted growth offered by market-linked options like mutual funds.
Disclaimer
This article is for informational purposes only and should not be treated as financial advice. Interest rates and rules may change as per SBI’s official guidelines. Investors are advised to verify the latest details with the bank before investing.
