SBI Annuity Deposit Scheme: Features, Benefits, Interest Rate & Eligibility Explained

Most people in India have the desire to have a regular and steady income after their retirement to lead their lives easily. So, keeping this in mind, State Bank of India has launched the SBI Annuity Deposit Scheme. SBI is a multinational public sector bank offering various schemes & financial support to its customers. This scheme is useful for senior citizens, especially those who are looking for a stable source of income after their retirement. Unlike regular fixed-income products that pay only interest, the SBI Annuity Deposit scheme pays both principal and interest amounts over the chosen tenure. In this blog, we will explore some more details about the scheme, such as interest rates, eligibility criteria, its features, benefits, and much more. 

What is the SBI Annuity Deposit Scheme?

SBI Annuity deposit is also known as the Monthly Annuity Installments, where you can choose the tenure accordingly, like three, five, seven, or ten years. This scheme is helpful for those people who need financial security and a regular cash flow after investing their savings. One thing that investors keep in mind is that the scheme requires a minimum investment of Rs 1,000. The scheme is simple, easy, and handled by the SBI bank, which gives the investors the confidence that their money is in safe hands. 

Various Features of the SBI Annuity Deposit Scheme

Some of the best features of the SBI Annuity Deposit Scheme are as follows: 

• The investors can invest their money in any branch of the SBI. 
• The minimum investment amount in the scheme is Rs 1000. There is no upper limit on the maximum deposit amount for this scheme.  
• This scheme can be taken for 36, 60, 84, or 120 months, which means 3, 5, 7, or 10 years.
• The monthly payment is given on the same date every month as the deposit month’s anniversary. If the date doesn’t exist (like 29th, 30th, or 31st), the payment is made on the 1st of the next month.
• In special cases, the bank allows an overdraft or loan of up to 75% of the balance of the annuity. After this, the monthly annuity is directly credited into the loan account.
• Premature withdrawal is allowed up to ₹15 lakh, but with a penalty (same as term deposits). In case of the depositor’s death, there is no limit on premature payment.
• The interest rate is the same as SBI term deposits, for both general and senior citizens.
• You can transfer this scheme between SBI branches, and nomination is allowed in favour of an individual.
• A universal passbook is provided for the deposit.
• The interest earned is taxable as per your income tax slab, and TDS is deducted at source.

Interest Rates of the SBI Annuity Deposit Scheme 2025

The table given below gives you the idea of the interest rates of the SBI Annuity Deposit Scheme 2025: 

Tenure	Interest Rates (p.a.)
	General Public	Senior Citizens
7 days to 45 days	3.50%	4.00%
46 days to 179 days	5.50%	6.00%
180 days to 210 days	6.25%	6.75%
211 days to less than 1 year	6.50%	7.00%
1 year to less than 2 years	6.80%	7.30%
2 years to less than 3 years	7.00%	7.50%
3 years to less than 5 years	6.75%	7.25%
5 years and up to 10 years	6.50%	7.50%
400 days (Amrit Kalash)	7.10%	7.60%
444 days (Amrit Vrishti)	7.25%	7.75%

Key Benefits of Investing in this Scheme

Below are the benefits of investing in this scheme: 

1. The scheme provides a consistent income stream, making it ideal for retirees and for those who want regular cash flow. 

2. The scheme is handled by the SBI team, so it provides the safety and security to their investors as compared to other investment avenues. 

3. No cap on maximum deposits allows for larger investments as per the individual financial goals. 

4. The scheme gives loan accessibility of 75% of his/her total amount. 

5. The interest rates of the scheme are similar to the SBI term deposits. Investors have the liability to choose their interest rates according to their investment tenure. The big benefit of this scheme is that senior citizens will receive an additional rate of interest. 

6. The bank will pay the full payment in advance in case of the death of the depositor. 

What are the different components of the Scheme?

Different components of the scheme are as follows: 

• Interest Rate

• The interest you earn depends on the investment period you choose.
• In this scheme, one-tenth of a percentage point is treated as one basis point.

Eligibility

• Any Indian resident, including minors, can invest in this scheme.
• Non-Resident Indians (NRIs) are not eligible.

Taxation

• Tax Deducted at Source (TDS) will apply to the returns you earn.
• The bank rounds off interest to the nearest rupee, which may make your last installment slightly different.

Premature Payment

• If the investor passes away during the tenure, the scheme allows early closure.
• The returns will then go to the legal heirs or joint account holders.

Loan Facility

• You can avail an overdraft or loan of up to 75% of the balance amount in special cases.
• After the loan is given, your annuity payments will be adjusted into your loan account.

Maturity Amount

• Both principal and interest are paid back in regular installments.
• By the end of the term, the maturity amount becomes zero.

How to Calculate the SBI Annuity Deposit

State Bank of India calculates the quarterly interest by using the formula below to generate the monthly returns. The formula is as follows: 

• A = P (1+r/n) ^ (n * t)
• In the above formula, 
• A stands for Maturity Amount
• P stands for the Principal Amount
• R stands for the Rate of Interest
• N stands for the Number of times the interest will compound in a year
• T stands for Total Tenure 
• Let’s understand with the help of an example:
• Put your imaginary figures into the formula, 50,000*(1+ 0.065/4)^(4*5)

For example, Mrs Meeta started investing in the scheme with Rs 50,000 for five years. Then, keeping her investment amount in mind, the bank will give her an interest rate of 6.50. The SBI bank will compute the compound interest and provide her with the returns as an EMI. The EMI will carry the components of reducing the principal and the interest calculated on the outstanding amount. 

Accordingly, Mrs Meeta will generate the total interest of Rs 19,021 on her investment of Rs 50,000. This means that she will receive the total return of Rs 69,02. Now, the scheme promises to give her the monthly repayments on the basis of her principal amount. It means that Mrs Meeta will receive Rs 1,150 extra every month till the end of her tenure. Then, after 5 years, her maturity amount will automatically reflect zero. 

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Eligibility Criteria required while applying to the Scheme

• The investors who want to apply for this scheme must be residents of India.
• Those investors who have single or joint accounts can invest in this scheme. 
• Customers belonging to the NRE or NRO category cannot start deposits under the SBI Annuity Deposit scheme.   

How to apply for SBI Annuity Deposit Scheme?

Below are some steps that you can apply to the scheme easily: 

1. Visit the nearby SBI branch. After that, ask for the application form from the branch staff.
2. After that, fill out that application form. 
3. Attach the required documents to the application form. 
4. Then the last step is to deposit the investment of a minimum of Rs 1000.  

FAQS about SBI Annuity Deposit Scheme

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