Move Over FDs! This Scheme By SBI Can Make You Earn Extra In EMIs

Do you know that India’s largest public sector bank, SBI (State Bank of India) offers a lesser-known scheme that can enable you to earn extra bucks, that too on a monthly basis, like EMIs.?

Earn Extra Income In EMIs Through SBI Annuity Deposit Scheme

We are talking about SBI’s Annuity Deposit Scheme which allows customers to pay one-time lump sum amount and then receive the same in the form of Equated Monthly Instalments (EMIs), comprising of a part of the principal amount as well as interest on the reducing principal amount, compounded at quarterly rests and discounted to the monthly value.

SBI Annuity Deposit Scheme Interest Rate?

Rate of interest on SBI annuity deposit scheme is the same as applicable to its FDs. Here are the current bank FD rates as per SBI website.

sbi annuity deposit scheme/sbi

Features Of SBI Annuity Deposit Scheme

Any SBI branch in India is where you can invest in this scheme.?In this scheme, a minimum investment of Rs. 1,000 is required. The maximum deposit amount under this scheme has no upper limit. You have a choice of 36, 60, 84, or 120 months for the deposit period.??

Regarding taxes, you will be required to pay TDS charges on the returns you will receive from investing in the SBI Annuity Deposit Scheme. The final annuity installment may differ because the bank rounds off the interest to the next rupee value.

If an investor passes away during the current term, the SBI Annuity Deposit plan permits early installment payments. The returns of this scheme are payable to the investor's joint account holders or legal heirs upon their passing.

In addition, the banks pay interest and principal over a certain length of time on the lowered principal. At the conclusion of the maturity period, this reduces the maturity amount to zero.??

Eligibility For SBI Annuity Deposit Scheme

sbi fd rates/ET

Investors in this scheme may open single or joint accounts and be resident Indian citizens, including minors.?The SBI Annuity Deposit scheme does not allow customers who fall under the NRE or NRO category to begin making deposits.? ?

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SBI Annuity Deposit Scheme's interest rates are similar to those of SBI's FD. Depending on how long they plan to invest, customers can select the interest rates. Investors who are senior citizens will also earn a higher interest rate.

In the event that the depositor passes away, the bank will pay the entire amount upfront. A loan facility of up to 75% of the depositor's total amount will be provided. For deposits made into the SBI Annuity Scheme, there is no maximum amount.??

Example To Help You Understand Better

Let’s consider an example for?SBI Annuity Deposit scheme to help you understand how this scheme works.?

For instance, as per Cleartax, you started SBI Annuity Deposit Scheme with Rs.50,000 for 5 years. If the applicable interest rate is 6.50%. the calculation will be:

A = P (1+r/n) ^ (n * t)

Here is A= Maturity amount

P= Principal amount

R= Rate of interest?

N= number of times the interest will compound in a year

T= Total tenure

Now, let’s place the values in the example as per the formula: A = P (1+r/n) ^ (n * t)

A= 50,000*(1+ 0.065/4)^(4*5)

According to this, you will generate a total interest of Rs.19,021 on his principal amount of Rs.50,000. This means he will receive a? total return of Rs.69,021. So, the SBI Annuity Deposit scheme promises to provide monthly repayments on the principal amount. This means you will receive Rs.1,150 every month till the end of his tenure. After the end of 5 years, your maturity amount will reflect as zero since all the amount (interest + principal) would have been paid as EMI to you in that period.?

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