SBI Annuity Deposit Scheme: A scheme that can you give monthly income after retirement

When you are old, your earnings may deplete, but your expenses remain the same. At times, expenses increase because of medical needs or for some other reasons. In such a situation, you need regular monthly income. SBI Annuity Deposit Scheme is one such investment plan that can help you get income every month in the form of equated monthly installments (EMIs). However, it's not a scheme solely based on retirement, an investor can also use it as a lump sum investment option to get regular monthly returns.

In SBI Annuity Deposit Scheme, an investor can deposit money for 36, 60, 84 or 120 months. Photo: File/Representational

SBI Annuity Deposit Scheme: Money is important at every stage of life as it gives you financial freedom. But you may feel the need of it more when you grow old, specially when your sources of income may deplete and you don't have income sources to fall back on. What do you do then?

You look for help from someone, may be from your children or some relative.

However, a better option can be to invest in a scheme that can give you guaranteed returns when you grow old, so that you won't feel dejected in your old age.

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SBI Annuity Deposit Scheme is one such investment plan where you can make a lump sum investment one time and can get equated monthly installments (EMIs) in the form of interest plus principal income.

Though the scheme can be a good option for post retirement life, investor at any age can use this SBI scheme as a risk-free investment option to get guaranteed returns.

In this write-up, know more about this SBI scheme.

What is SBI Annuity Deposit Scheme?

According to information available on the SBI website, in the SBI Annuity Deposit Scheme, you have to deposit a lump sum amount and the depositor is given interest along with a part of the principal amount every month.

This interest is equal to the bank's term deposit i.e. FD. Interest is calculated on compounding every quarter based on the amount remaining in the account.

Any Indian citizen can deposit their money in this scheme.

SBI Annuity Deposit Scheme: Duration and interest rate

In SBI Annuity Deposit Scheme, an investor can deposit money for 36, 60, 84 or 120 months, which means you can arrange income for a maximum of 10 years.

Whatever interest rate is applicable on fixed deposits (SBI FDs) for the tenure for which you have deposited the amount, the same will be applicable in this annuity deposit scheme.

One can deposit a minimum monthly annuity amount of Rs 1000.

However, there is no limit on maximum deposit.

The annuity payment is decided according to the deposited amount.

Annuity starts being received from the scheduled date of the next month of deposit.

After depositing the amount, you are issued a universal passbook.

SBI Annuity Deposit Scheme: Interest for senior citizens

Under SBI Annuity Deposit Scheme, you can open both single and joint accounts.

The annuity payment is credited to the linked savings account or current account after deducting TDS.

In this, interest is given to common customers and senior citizens only on the basis of term deposit.

SBI gives 0.50 per cent more interest to senior citizens than general customers.

SBI Annuity Deposit Scheme: Loan facility

You also get loan facility in SBI Annuity Deposit Scheme.

If needed, one can get overdraft/loan up to 75 per cent of the balance amount of the annuity in special cases.

But after taking the loan, the annuity payment will be credited to the loan account.

Apart from this, you get the facility of premature withdrawal. In this, premature payment is allowed for deposits up to Rs 15,00,000.

If you have deposited more than Rs 15 lakh, then after withdrawal of up to Rs 15 lakh, the remaining amount will remain deposited in the account and you will continue to get annuity in return.

The same rules regarding penalty are applicable as are applicable to FD.

However, in case of death of the account holder, the entire amount can be withdrawn by the nominee.

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