Guaranteed monthly interest! Did you know this special scheme?

 

The fixed deposit scheme of the State Bank of India is still the first choice of many as a safe investment.  Under this scheme, a depositor is paid interest on a fixed-term basis.  On the other hand, SBI Annuity Deposit Scheme is a little different.

• What's the story?

In SBI FD, the depositor has to make a fixed-term one-time deposit.  A one-time expiration occurs after the expiration of the term. On the other hand, in SBI Annuity Deposit Scheme, depositors make lump sum deposits.  In return, the customer is paid depending on the tenure.  You will get it through an interest in equal monthly installments.

According to the official website of the State Bank of India — online.sbi, 'Under the Annuity Deposit Scheme, a customer deposits a lump sum of Rs.  It is repaid to the customer with interest in equal periods.  Monthly installments are actually part of this principal amount.  Interest applicable on the reduced principal amount is also included.  Through this scheme, customers can specify the monthly payment amount against a one-time deposit.  Payment will begin on the anniversary date of the month.  If not (29th, 30th,a  and 31st) then it will be given on 1st of next month.'

• What's next?

Explaining the difference between SBI FD and SBI Annuity Deposit Scheme, SBI's website says, 'In a fixed deposit account, the customer deposits money once and gets the full amount on the maturity date.  Interest is paid at periodic intervals.  Annuity deposits take lump sum deposits and the money is paid to the customer along with interest in equal monthly installments over the chosen tenure.'