State Bank of India is an Indian multinational and India’s largest public sector bank headquartered in Mumbai. SBI offers annuity deposit plan wherein you can get a fixed amount every month after depositing a one-time lump sum amount. In this post, I share all the information you want to know about SBI Annuity Deposit Scheme.
Table of Contents
What is SBI Annuity Deposit Scheme?
SBI annuity deposit plan enables the depositor to deposit a one-time lump sum amount and receive the same in monthly annuity installment.
The Equated Monthly Instalment (EMI) amount comprises a part of the principal amount as well as interest on the reducing principal amount.
The interest is compounded quarterly and discounted to the monthly value.
Here is all that you need to know about annuity deposit in SBI (State Bank of India).
Features of SBI Annuity Deposit Scheme
The following are the key features of this annuity deposit in SBI Bank.
1. The scheme enables the depositors to deposit a one-time lump sum amount and receive the same in EMIs, comprising part of the principal amount plus interest.
2. You can choose the period of deposit from 36 months (3 years), 60 months (5 years), 84 months (7 years), or 120 months (10 years).
3. The scheme is available at all branches of the State Bank of India.
4. The amount for this scheme is based on a minimum monthly annuity of Rs.1000/- for the relevant period.
5. The minimum amount of deposit under this scheme should not be below Rs.25,000/-.
6. There is no upper limit on the deposit amount.
7. SBI annuity deposit scheme interest rate will be the same that applies to term deposits.
8. For SBI staff and SBI pensioners, the interest rate payable will be 1.00% above the applicable rate.
9. For senior citizens (60 years and above), the interest rate payable will be 0.50% above the applicable rate.
10. The payment of the annuity will be on the anniversary date of the month following the month of deposit. If that date is non-existent like 29th, 30th, and 31st then it will be paid on the first day of the next month.
11. The annuity payment will be subject to TDS on the interest amount. It will be credited to the linked savings or current account.
12. The nomination facility is available with the scheme.
13. In special cases, an overdraft or loan up to 75% of the balance amount of the annuity may be granted.
14. A universal passbook is issued by the bank.
15. The scheme can be transferred among State Bank of India branches.
Eligibility Criteria
Any resident individuals, including minors, are eligible to open this scheme. The mode of holding in this could be single or joint. Anyone falling in the NRE or NGO categories is not eligible for this scheme.
Minimum and Maximum Deposit Amount
The amount for this scheme is based on a minimum monthly annuity of Rs.1000/- for the relevant period. The minimum amount of deposit in this plan should not be below Rs.25,000/-. However, there is no maximum/upper limit on the deposit amount.
Tenure of the Scheme
You can invest in this scheme for 3 years, 5 years, 7 years, or 10 years.
SBI Annuity Deposit Scheme Interest Rate
The SBI annuity interest rate will be the same that applies to SBI term deposits or fixed deposits. For example, if you deposit for 3 years, then the interest rate will be the same that is applicable for a term deposit of 3 years.
At present, the State Bank of India offers the following interest rates on retail domestic term deposits (Below Rs.2 Core).
| Tenors | Interest Rates |
| 3 years to less than 5 years | 5.30% |
| 5 years and up to 10 years | 5.40% |
For SBI staff and SBI pensioners, the interest rate payable will be 1.00% above the applicable rate. SBI annuity plan rate of interest for senior citizens (60 years and above) will be 0.50% above the applicable rate.
Note: These are the interest rates on retail domestic term deposits as of 8th January 2021. The term deposit interest rates mentioned above are subject to change at the discretion of the bank.
Click here for latest SBI interest rates on retail domestic term deposits.
Payment of Annuity
The payment of annuity will be on the anniversary date of the month following the month of deposit. In case, the date is non-existent like 29th, 30th, and 31st then it will be paid on the 1st day of the next month.
Note that the annuity payment is subject to TDS on the interest amount. It will be credited to the linked savings account or current account.
Overdraft and Loan Facility
Within this scheme, an overdraft or loan up to 75% of the balance amount of the annuity may be granted in special cases. Note that after disbursal of overdraft or loan, any further annuity payment is deposited in the loan account only.
Premature Closure and Payment
Within this scheme, premature closure permitted in the event of the depositor’s death. Premature payment also allowed for deposits up to a maximum volume of Rs.15 lakh. Note that the premature penalty is chargeable as applicable to fixed deposits.
FAQs (Frequently Asked Questions)
1. What is an annuity deposit?
A lump sum amount deposited in this plan by a depositor which repaid to the depositor over a period in equated monthly installments. The EMIs comprise part of the principal amount and interest on the reducing principal amount as well.
2. Is there any monthly income scheme in SBI?
Yes, SBI offers its annuity deposit plan wherein you can get a monthly income after you deposit a one-time lump sum.
3. How an annuity deposit is different from a fixed deposit?
In a fixed deposit account, you make a one-time deposit and receives the maturity amount at the maturity date. An annuity deposit accepts a one-time deposit and the amount repaid to the depositor over the tenor selected by the depositor along with interest in EMIs.
4. Is this plan is subject to TDS?
Yes, the interest payable will be subject to TDS under this scheme.
5. Can I close this plan account online?
No, premature closure and payment permitted through the branch only in case of death of the depositor.
Also Read: SBI Fixed Deposit (FD): Park your lump sum amount in SBI Term Deposit
Final Thoughts
You can get a monthly amount after depositing a one-time lump sum amount in SBI Annuity Deposit Scheme. You can invest in this scheme for 3 years, 5 years, 7 years, or 10 years. Therefore, if you have a lump sum amount in hand and you are looking for a monthly income without any risk then this is the scheme for you.
Note: This post was originally published on February 21, 2021 and has been completely updated for accuracy and comprehensiveness.
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