State Bank of India (SBI) offers the Annuity Deposit Scheme wherein customers deposit a lumpsum amount with the bank and receive monthly repayments that comprise of the principal amount and the interest accrued on the diminishing principal amount held with the bank. These are called monthly annuity instalments. The period of deposit is either 3 years, 5 years, 7 years, or 10 years. The rate of interest is the same as for term deposits of the same tenure. Senior citizens can get additional interest rates as applicable for term deposits. While there is no upper limit for the deposit amount, the minimum deposit amount is Rs.25,000. In special cases, a loan of up to 75% of the balance amount can be availed. The scheme is transferrable between SBI branches.
Most banks that offer annuity deposit schemes specify that only Indian residents can apply for the same. NRE and NRO customers are not eligible.
|Account Type||Term Deposit Account / Special Term Deposit Account (Single OR Joint depending upon the bank)|
|Deposit Amount||The deposit amounts vary from bank to bank. For example, depending on minimum monthly annuity, the minimum amount that can be deposited into an SBI annuity deposit account is Rs.1,000 for the relevant period. The minimum deposit cannot be under Rs.25,000 in any case. There is no maximum limit on how much money you can deposit into this account.|
|Rate of Interest||As applicable to term deposits depending upon the choice of the depositor. For instance, the lowest returns with SBI can be 5.25% and the highest is 7.5%. Senior citizens get an extra 0.5% return on their investment.|
|Period||Customers usually have a choice between 12, 24, 36, 60, 84 or 120 months (one year, two years, three years, five years, seven years and ten years). Each bank has its own set of tenures, so it is important to look for the one that best suits your needs before applying for one.|
|TDS||Tax benefits provided under section 80C of Income Tax Act, 1961|
|Loan against the scheme||While some banks offer loans against an annuity deposit scheme, there are other banks that do not offer the facility to customers.|
|Nomination (if any)||Available in some cases, but only one person can be nominated by an individual, but joint accounts can nominate more than one person with common consent.|
Following are the interest rates applicable to customers who deposit amounts up to Rs.2 crore.
|Tenure||Interest Rates for General Public||Interest Rates for Senior Citizens|
*Interest rates are subject to the bank’s discretion and can be changed at any time in the future.
*Interest rates effective from 14 June 2021
The bank generally does not approve of premature payment, but customers will be allowed to do so only in case of the death of the depositor.
Customers who start a recurring deposit account must make payments in instalments and the maturity amount is presented to the customer on the maturity date. Annuity deposits, on the other hand, allow customers to make one-time deposits so that the amount in addition to interest on diminishing principle can be given back to the customer in instalments over the predetermined tenor.
Customers who open fixed deposit account must make an initial deposit for which they will receive an amount that includes interest and principal in case of STDR and only principal in case of TDR on the maturity date. Annuity deposits, in comparison, require customers to make a one-time deposit so that the amount along with the interest can be given back to the customer over the predetermined tenor chosen by the customer, in EMIs.
Yes, the minimum amount of money that can be deposited will depend on minimum monthly annuity Rs.1,000 for the relevant period. For instance, if the account is opened with a three-year tenor, the minimum deposit amount is Rs.36,000. There is no maximum limit, allowing customers to deposit as much money as they possibly can.
Yes, customers are allowed to debit their OD, current or savings account to open an annuity deposit account. The account chosen for debiting must be a valid transactional account via internet banking medium and must not be a locked / dormant / stopped account.
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