AWhen it comes to secure and steady income in the long term, many people prefer banking products offered by trusted institutions. One such reliable product is the SBI Annuity Deposit Scheme. Designed to offer regular income on a lump sum deposit, this scheme is ideal for individuals seeking predictable monthly cash flows while ensuring safety of capital.
If you’ve ever searched for a stable investment option backed by a government-owned bank, this article will walk you through everything you need to know about the SBI Annuity Deposit Scheme, including how it works, who can invest, benefits, and how to use the SBI Annuity Deposit Scheme calculator to plan better.
What is the SBI Annuity Deposit Scheme?
The SBI Annuity Deposit Scheme is a unique fixed deposit plan offered by the State Bank of India. Under this scheme, you deposit a lump sum amount and receive equated monthly installments (EMIs), which include both principal and interest, over a specific tenure.
It is somewhat similar to a reverse loan. In a loan, you borrow money and repay it in EMIs. Here, you invest money and get paid in EMIs.
Key Features of the SBI Annuity Deposit Scheme
Let’s take a closer look at the main features of this scheme:
The SBI Annuity Deposit Scheme is a perfect fit for:
Here’s how the monthly payout is structured:
Each month, SBI pays back a fixed EMI, which includes part of your principal plus interest earned on the remaining amount. Over the term, the principal reduces and so does the interest component. But the total EMI remains the same.
This is different from a recurring deposit or fixed deposit, where you only receive the principal and interest at maturity. In this case, your capital returns gradually every month.
Example of How It Works
Suppose you deposit ₹5,00,000 in the SBI Annuity Deposit Scheme for 60 months at an interest rate of 6.5% per annum.
Using the SBI Annuity Deposit Scheme Calculator
To simplify planning, SBI and other financial portals provide an online annuity calculator. This helps you estimate:
The calculator will show the monthly installment, helping you understand how much you’ll receive and whether the investment suits your income goals.
Benefits of the SBI Annuity Deposit Scheme
Let’s explore the biggest advantages this scheme has to offer:
1. Guaranteed Monthly Income
The scheme ensures a fixed income every month, making it ideal for people who prefer income certainty.
2. Capital Safety
Since SBI is a government-backed bank, your deposit is in safe hands.
3. Flexible Tenures
You can choose a period that aligns with your financial goals—be it short-term needs or long-term planning.
4. Senior Citizen Friendly
Senior citizens get additional interest, which makes the monthly payout even more attractive.
5. Nomination & Loan Facility
You can nominate a family member, and loans up to 75% of the balance amount are available if needed.
Limitations to Be Aware Of
Despite its benefits, there are a few limitations:
Tax Implications
The interest earned under the SBI Annuity Deposit Scheme is fully taxable as per your income tax slab. SBI will also deduct TDS (Tax Deducted at Source) if interest exceeds the specified limits.
If you're a senior citizen, you can submit Form 15H to avoid TDS, provided your total income is within exemption limits.
A Complete Guide to the SBI Annuity Deposit Scheme: Benefits, Features & Calculator
Regarding secure and steady income in the long term, people in general prefer banking products by trusted institutions. The SBI Annuity Deposit Scheme is one such trusted product. Regular income on a lump sum deposit is what this scheme is all about. It is ideal for someone who desires predictable monthly cash flows while ensuring the capital is safe.
If you have ever looked for a stable investment option backed by a government-owned bank, this article covers everything you need to know about the SBI Annuity Deposit Scheme: how it works, who can invest, benefits, and how to use the SBI Annuity Deposit Scheme calculator for better planning.
Difference between SBI Annuity Scheme and Fixed Deposit
Conclusion
The SBI Annuity Deposit Scheme is great for safe investors looking for periodic monthly income without market risk. Trustworthy from the family of SBI, it allows you to convert a lump sum into a regular income stream. The scheme may probably not give the highest returns, but it guarantees stability, predictability, and serenity, mainly to retirees and other danger-prone investors.
One can use the SBI Annuity Deposit Scheme calculator to plan investments wisely and determine the right deposit amount and tenure according to requirements.
Whether it is for retirement planning, taking care of a dependent, or creating passive income for yourself, include the SBI Annuity Scheme in your financial planning—especially if you are the kind of person who prefers security over high returns.
If you’ve ever searched for a stable investment option backed by a government-owned bank, this article will walk you through everything you need to know about the SBI Annuity Deposit Scheme, including how it works, who can invest, benefits, and how to use the SBI Annuity Deposit Scheme calculator to plan better.
What is the SBI Annuity Deposit Scheme?
The SBI Annuity Deposit Scheme is a unique fixed deposit plan offered by the State Bank of India. Under this scheme, you deposit a lump sum amount and receive equated monthly installments (EMIs), which include both principal and interest, over a specific tenure.
It is somewhat similar to a reverse loan. In a loan, you borrow money and repay it in EMIs. Here, you invest money and get paid in EMIs.
Key Features of the SBI Annuity Deposit Scheme
Let’s take a closer look at the main features of this scheme:
- Lump Sum Deposit: You deposit a one-time amount with SBI.
- Monthly Payouts: You receive fixed monthly payouts (principal + interest).
- Fixed Tenure Options: Choose from 36, 60, 84, or 120 months.
- Minimum Deposit: Minimum deposit should be such that the monthly installment is at least ₹1,000.
- No Maximum Limit: There is no upper limit for investment.
- Interest Rates: The interest rate is the same as that of SBI fixed deposits, applicable at the time of investment.
- Interest Calculation: Interest is compounded quarterly and paid monthly along with part of the principal.
- Nomination Facility: You can nominate someone to receive the balance amount in case of death.
- Senior Citizen Benefits: Senior citizens get higher interest rates, similar to regular SBI fixed deposit rules.
The SBI Annuity Deposit Scheme is a perfect fit for:
- Retirees looking for regular monthly income.
- Individuals with a large corpus who want safe and predictable returns.
- People who want an alternative to traditional fixed deposits.
- Parents planning regular payouts for children’s education or family support.
Here’s how the monthly payout is structured:
Each month, SBI pays back a fixed EMI, which includes part of your principal plus interest earned on the remaining amount. Over the term, the principal reduces and so does the interest component. But the total EMI remains the same.
This is different from a recurring deposit or fixed deposit, where you only receive the principal and interest at maturity. In this case, your capital returns gradually every month.
Example of How It Works
Suppose you deposit ₹5,00,000 in the SBI Annuity Deposit Scheme for 60 months at an interest rate of 6.5% per annum.
- SBI will calculate the EMI using the reducing balance method.
- Every month, you will get a fixed monthly installment, say around ₹10,000.
- Over 5 years, you will receive a total of ₹6,00,000 (including interest).
- At the end of the tenure, nothing is left to be repaid as the principal has been returned in full.
Using the SBI Annuity Deposit Scheme Calculator
To simplify planning, SBI and other financial portals provide an online annuity calculator. This helps you estimate:
- Monthly EMI amount
- Total payout over the term
- Interest earned
- Effective yield
- Visit SBI’s official website or a reliable third-party financial calculator.
- Enter your deposit amount.
- Select your tenure (3, 5, 7, or 10 years).
- Choose the interest rate applicable on the day.
- Click "Calculate."
The calculator will show the monthly installment, helping you understand how much you’ll receive and whether the investment suits your income goals.
Benefits of the SBI Annuity Deposit Scheme
Let’s explore the biggest advantages this scheme has to offer:
1. Guaranteed Monthly Income
The scheme ensures a fixed income every month, making it ideal for people who prefer income certainty.
2. Capital Safety
Since SBI is a government-backed bank, your deposit is in safe hands.
3. Flexible Tenures
You can choose a period that aligns with your financial goals—be it short-term needs or long-term planning.
4. Senior Citizen Friendly
Senior citizens get additional interest, which makes the monthly payout even more attractive.
5. Nomination & Loan Facility
You can nominate a family member, and loans up to 75% of the balance amount are available if needed.
Limitations to Be Aware Of
Despite its benefits, there are a few limitations:
- You can’t make premature withdrawals easily (except in case of death).
- Once you lock in your interest rate, it doesn’t increase even if market rates go up.
- It may offer lower returns compared to some market-linked products.
- No tax benefit is provided under this scheme.
Tax Implications
The interest earned under the SBI Annuity Deposit Scheme is fully taxable as per your income tax slab. SBI will also deduct TDS (Tax Deducted at Source) if interest exceeds the specified limits.
If you're a senior citizen, you can submit Form 15H to avoid TDS, provided your total income is within exemption limits.
A Complete Guide to the SBI Annuity Deposit Scheme: Benefits, Features & Calculator
Regarding secure and steady income in the long term, people in general prefer banking products by trusted institutions. The SBI Annuity Deposit Scheme is one such trusted product. Regular income on a lump sum deposit is what this scheme is all about. It is ideal for someone who desires predictable monthly cash flows while ensuring the capital is safe.
If you have ever looked for a stable investment option backed by a government-owned bank, this article covers everything you need to know about the SBI Annuity Deposit Scheme: how it works, who can invest, benefits, and how to use the SBI Annuity Deposit Scheme calculator for better planning.
Difference between SBI Annuity Scheme and Fixed Deposit
Features | SBI Annuity Plan | Fixed Deposit |
| Payouts | Monthly (Principle + Interest) | Lump Sum at Maturity |
| Liquidity | Lives (Loan available) | Premature Withdrawal |
| Ideal for | Regular income | Lump sum savings |
| Interest Rates | Similar to FD | Same |
Conclusion
The SBI Annuity Deposit Scheme is great for safe investors looking for periodic monthly income without market risk. Trustworthy from the family of SBI, it allows you to convert a lump sum into a regular income stream. The scheme may probably not give the highest returns, but it guarantees stability, predictability, and serenity, mainly to retirees and other danger-prone investors.
One can use the SBI Annuity Deposit Scheme calculator to plan investments wisely and determine the right deposit amount and tenure according to requirements.
Whether it is for retirement planning, taking care of a dependent, or creating passive income for yourself, include the SBI Annuity Scheme in your financial planning—especially if you are the kind of person who prefers security over high returns.
