If you want to invest your money in a way where you put a lump sum amount at once and then receive monthly returns, the SBI Annuity Deposit Scheme from the State Bank of India might be a good choice.
In this scheme, you invest a one-time lump sum, and then you receive a part of the principal amount and interest on the decreasing principal amount.
SBI Annuity Deposit Scheme
You can invest in this scheme for 120 months. The smallest monthly investment is Rs 1,000.
If needed, you can withdraw your money early for deposits up to Rs 15,00,000. There’s no limit on the deposit amount.
In some cases, you can even take an overdraft or loan up to 75% of the total annuity balance. If the depositor passes away, early payment can be made with no limit.
What’s the interest rate? (SBI Annuity Deposit Scheme Interest Rate)
The interest rate in this scheme is the same as what the public and senior citizens get on regular term deposits.
SBI has recently increased the interest rates on its fixed deposits. Regular investors get 6.1 percent interest, and senior citizens get 6.9 percent interest.
Different tenures have different interest rates in this scheme since deposits can be made in four tenures.
Is the Annuity Deposit Scheme like FD?
No, the annuity deposit scheme is different from a fixed deposit. In a fixed deposit, you deposit money once and get the principal and interest after maturity.
In the case of TDR, only the principal amount is received after maturity, and interest is received at certain intervals.
In contrast, in an annuity deposit, you deposit the money all at once, and the bank repays you over the agreed-upon tenure.
You receive a part of the principal amount and interest every month. This means the bank gives you EMI each month, and your principal amount keeps decreasing until it becomes zero at maturity.
