In this financial arrangement, the bank encourages you to invest a lump sum amount upfront. Subsequently, you receive a portion of the principal amount along with interest calculated on the diminishing principal amount.


If you are seeking an investment avenue where you can invest a lump sum and receive monthly returns, the SBI Annuity Deposit Scheme from the prominent public sector bank State Bank of India might be a suitable choice. Under this scheme, you invest a lump sum amount, and then you receive a part of the principal amount along with interest on the reducing principal amount.


Key Features of SBI Annuity Deposit Scheme:

  • The investment duration for this scheme is 120 months.
  • The minimum monthly annuity is Rs 1,000.
  • Premature withdrawals are allowed on deposits up to Rs 15,00,000.
  • There is no restriction on the maximum deposit amount.


  • Depositors can avail themselves of overdraft or loan facilities up to 75% of the total annuity balance in certain cases.
  • In the event of the depositor’s demise, premature payment can be facilitated without any limit.

Interest Rates in SBI Annuity Deposit Scheme:


The interest rate offered in this scheme aligns with the rates applicable to term deposits for both the general public and senior citizens. SBI has recently revised its fixed deposit interest rates, with common investors receiving 6.1 percent interest and senior citizens earning 6.9 percent interest. Different tenures in this scheme attract varying interest rates, given the flexibility to choose from four tenures.

Distinguishing Annuity Deposit Scheme from Fixed Deposit:

It’s important to note that the annuity deposit scheme differs from fixed deposits. In a fixed deposit, the depositor invests a sum of money once and receives the principal and interest after maturity (in the case of STDR). For TDR, only the principal amount is received upon maturity, and interest is received at specified intervals.


Contrarily, in the annuity deposit scheme, you make a one-time lump sum deposit, and the bank repays

you over the chosen tenure. Each repayment includes a portion of the principal amount and interest. Essentially, the bank disburses EMIs to you every month, comprising a segment of the principal amount and interest. This structure leads to a gradual reduction in the principal amount, ultimately reaching zero by the time of maturity.