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    Annuity Deposit Scheme

    An annuity deposit scheme enables depositors to make one-time lump sum payments which they can receive in EMIs that comprise a portion of the principal amount in addition to the interest on the diminishing principal amount, discounted to the monthly value after being compounded to quarterly rests. Customers will have to start making interest payments exactly a month after the date on which the deposit was made. In case the date does not exist (such as the 29th, 30th or 31st), the payment has to be made on the first day of the following month.

    Eligibility Criteria

    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.


    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.


    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.

    Annuity Deposit Scheme Interest Rates

    Following are the interest rates applicable to customers who deposit amounts up to Rs.1 crore.


    Existing rate for Public

    Revised for Public w.e.f 05.10.2015

    Existing rate for Senior Citizens

    Revised rate for Senior Citizens w.e.f 05.10.205

    7 days to 45 days 5.50% 5.25% 5.75% 5.50%
    46 days to 179 days 6.75% 6.50% 7% 6.75%
    180 days to 210 days 7% 6.75% 7.25% 7%
    211 days to 365 days 7.25% 7% 7.50% 7.25%
    365 days to 455 days 7.5% 7.25% 7.75% 7.50%
    456 days to 730 days 7.75% 7.50% 8% 7.75%
    Two years to three years 7.75% 7.50% 8% 7.75%
    Three years to five years 7.25% 7% 7.50% 7.25%
    Five years to ten years 7.25% 7% 7.50% 7.25%

    *Interest rates are subject to the bank’s discretion and can be changed at any time in the future.

    *Rates as of Dec 1st 2015

    Frequently Asked Questions

    1. Can I make premature payments towards the scheme?

      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.

    2. What is the difference between annuity deposit and a recurring deposit account?

      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.

    3. What is the difference between annuity deposits and a fixed deposit account?

      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.

    4. Is there a minimum and maximum limit for deposits towards this scheme?

      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.

    5. Can I debit money from any other account to open an annuity deposit account?

      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.

    Useful Information on SBI Fixed Deposit

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