State Bank of India (SBI), the country’s largest lender, is offering a scheme called SBI Annuity Deposit Scheme. In this scheme, investors can are required to park a lump sum deposit and can earn monthly annuity installments that include a portion of the principal amount as well as interest. All citizens of India can apply for this scheme. Customers who are NRO or NRE are not eligible for this product.
Eligibility for the Scheme
According to SBI’s official website, all residents, including minors, are eligible to apply for the scheme through a single or joint method. NRO or NRE Customers are not eligible for this product. Senior citizens are eligible to get an additional rate of interest over the regular rate. Interested customers can apply for the SBI Annuity Scheme using savings, current, or OD account, as per SBI guidelines. However, the account selected for the scheme must be a legitimate operational account with Internet Banking enabled and the account should not have been halted, dormant, or locked.
Interest rate and Maturity period
The SBI Annuity Scheme is available at all SBI branches and comes with a tenure of 36, 60, 84, or 120 months. If the customer want to make an SBI Annuity Scheme with a maturity duration of 3 to 10 years, then he has to pay a minimum deposit amount for annuity deposit, which is based on a minimum monthly annuity of Rs 1000 for the applicable period. According to SBI guidelines, there is no maximum deposit limit if the customer is making it offline but, if they want to make the deposit then the maximum deposit limit would be limited to the same amount set for fund transfer within one’s own account.
The interest rate provided on the SBI Annuity Deposit Scheme will be as applicable to term deposits of the term chosen by the account holder. On the SBI Annuity Scheme, customers will get the same rate of interest applicable to SBI Term Deposits for the general public and senior citizens. Let us tell you that SBI increased interest the rates on fixed deposits on June 14, 2022. Currently, SBI offers an interest rate of 5.45 per cent to 5.50 per cent to the general public. While the senior citizens gets 5.95 per cent to 6.30 per cent interest rate on deposits maturing in 3 to 10 years. Tax Deducted at Source (TDS) will be applied to the interest paid on the Annuity deposit. So, customer need to submit their PAN card to avoid the TDS amount.
Premature withdrawal and overdraft facility
According to SBI’s terms and conditions, premature closure of the scheme is acceptable in case the depositor dies, and premature payment is permissible for deposits up to Rs 15.00 lacs. Premature withdrawals are subject to the same premature penalty as term deposits. According to SBI’s current premature closure guidelines, the applicable penalty for term deposits above Rs 5.00 lacs will be 1% (all tenors) and 1% below the rate applicable at the time of deposit will be provided to the depositor as a premature withdrawal amount for the period of deposit remained with the bank. The depositor can make an overdraft/loan of up to 75% of the balance amount of the annuity for specific circumstances such as education, marriage, or any other emergency. According to SBI, annuity payments will be credited to the loan account only after the OD/loan has been disbursed.