SBI or State Bank of India, the country's largest lender, offers annuity deposit scheme, which is a type of fixed deposit (FD) or term deposit. The scheme enables the depositor to pay a one-time lump sum amount and receive the same in equated monthly instalments (EMIs). It comprises a part of the principal amount as well as interest on the reducing principal amount, according to the bank's official website - sbi.co.in. The amount is compounded at quarterly rests and discounted to the monthly value, noted SBI.
Here are five things to know about SBI's annuity deposit scheme:
1. Amount: One needs to deposit a minimum amount of Rs. 25,000. However, there is no maximum limit of deposit amount for SBI's annuity scheme.
2. Tenure: A term of 36 months, 60 months, 84 months or 120 months (3 years, 5 years, 7 years or 10 years) is available under SBI's deposit scheme.
3. Rate of Interest: The rate of interest is same as applicable to the fixed deposit account of the term opted by the depositor. The following FD interest rates are for deposits below Rs. 1 crore, according to sbi.co.in:
4. Premature withdrawal: Under SBI annuity deposit scheme, premature payment is permitted only in case of death of the depositor.
5. Other facilities: Overdraft or loan up to 75 per cent of the balance amount of annuity can be granted on special cases, said SBI. After disbursal of loan, further annuity payment is deposited in loan account only. The bank also offers a nomination facility with this scheme.
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