For countless families across India, true financial stability is achieved only when income flows regularly every month. Whether it is a salaried professional planning for the future, a retiree looking for dependable income, or parents managing educational expenses, predictable cash flow plays a major role in maintaining financial balance. To address these needs, the State Bank of India (SBI), the nation’s largest public sector bank, offers a unique investment option: the SBI Annuity Deposit Scheme.
This scheme allows people to invest a single lump-sum amount and receive fixed monthly installments that include both principal and interest. The structure resembles a pension-like income plan but without the risks of market-linked products such as stocks or mutual funds. Because of its simplicity and reliability, the scheme is widely considered a safe choice for conservative investors who prefer guaranteed income.
This complete guide has been rewritten to provide a fresh, easy-to-understand overview of the SBI Annuity Deposit Scheme. It covers the scheme’s features, interest rates, eligibility, advantages, drawbacks, application procedure, and sample payout illustrations.
What is the SBI Annuity Deposit Scheme?
The SBI Annuity Deposit Scheme is a special deposit product where a customer pays a one-time lump sum, and SBI returns this amount in the form of equal monthly installments (EMIs) over a selected tenure. Each monthly payout includes:
- A portion of the initial deposit (principal), and
- Interest calculated on the remaining balance.
The interest component gradually decreases every month because the principal reduces over time. Thus, it is structured in a way similar to reverse EMIs.
This scheme is perfect for individuals who seek stable, predictable monthly income without worrying about market fluctuations or managing complex financial products.
Who Should Consider This Scheme?
The SBI Annuity Deposit Scheme is ideal for people who need regular monthly income. Some of the key groups who benefit the most include:
✔ Retired Individuals
Once a person retires, their monthly salary stops, but expenses continue. A lump-sum retirement fund can be converted into reliable monthly income through this scheme. It acts as a steady pension-like stream for:
- Household expenses
- Medical needs
- Travel and personal spending
✔ Parents Supporting Students
Families whose children live and study in different cities often need to send monthly funds. Rather than giving a large amount at once, parents can invest in this scheme and ensure stable monthly transfers.
✔ Risk-Averse Investors
Investors who avoid equity, mutual funds, or risky instruments prefer this scheme because:
- Returns are guaranteed
- Capital is protected
- Payouts are fixed
✔ Families Wanting Joint Income
A joint annuity deposit can be opened by couples or elderly parents and children to manage shared financial responsibilities efficiently.
Key Features of SBI Annuity Deposit Scheme
This scheme is popular due to its flexible structure and bank-backed safety. Here are its major highlights:
🔹 One-Time Deposit & Immediate Monthly Income
Just deposit a lump sum once. Monthly payouts begin from the next month itself.
🔹 Multiple Tenure Options
Customers can choose from:
- 3 years
- 5 years
- 7 years
- 10 years
The tenure selected determines the EMI amount.
🔹 Minimum Deposit – ₹25,000
The scheme is accessible even for small savers.
🔹 No Maximum Limit
Individuals, families, and even HUFs can invest any amount based on their financial capacity.
🔹 Loan Facility Up to 75%
In case of emergencies, customers can avail a loan of up to 75% of the deposited amount.
🔹 Nomination Facility
Ensures that beneficiaries receive the amount without legal complications.
🔹 No Age Restrictions
Any resident Indian—adult or senior—can invest.
🔹 Tax Implications
Interest earned is taxable.
However, eligible individuals can submit:
- Form 15G
- Form 15H
to avoid TDS deductions.
Interest Rates for 2025
SBI offers interest rates similar to its regular term deposits, compounded quarterly.
| Tenure | General Public | Senior Citizens | SBI Staff |
|---|---|---|---|
| 3–5 years | 5.30% | 5.90% | 6.40% |
| 7–10 years | 5.40% | 5.90% | 6.40% |
The monthly EMI includes interest, which decreases gradually as the principal reduces.
Illustration of Monthly Payouts
To help understand how much income the scheme can generate, here are some sample estimates:
| Deposit Amount | Tenure | Estimated Monthly Payout |
|---|---|---|
| ₹1,00,000 | 3 years | ₹3,259 |
| ₹2,00,000 | 3 years | ₹6,451 |
| ₹3,00,000 | 3 years | ₹9,677 |
Higher deposits lead to higher monthly income, making the scheme well-suited for those who want to convert large savings into fixed monthly earnings.
Advantages of SBI Annuity Deposit Scheme
The scheme offers several benefits that make it reliable and appealing to risk-averse investors:
✔ High Safety
SBI, being India’s largest and most trusted bank, ensures your money stays secure.
✔ Guaranteed Monthly Income
It is ideal for meeting everyday expenses like:
- Rent
- Medical bills
- Education fees
- Groceries
- Utility payments
✔ Flexible Tenure Selection
Customers can align the tenure based on their goals—short-term needs or long-term financial stability.
✔ Loan Against Deposit
Instead of withdrawing or breaking your deposit, a loan can be availed during emergencies.
✔ Better Interest Rates for Senior Citizens
Seniors enjoy higher returns, improving their monthly income.
✔ Easy Documentation
All you need is:
- Aadhaar
- PAN
- Address proof
- Passport-size photo
The process is simple and hassle-free.
Limitations of the SBI Annuity Deposit Scheme
Despite its advantages, the scheme may not suit everyone.
❌ Limited Liquidity
Premature withdrawal is not allowed except under specific emergencies.
❌ Taxable Interest
Individuals in higher tax slabs may find the scheme less attractive due to tax deductions.
❌ Moderate Returns
Returns are lower compared to long-term investments like:
- Equity mutual funds
- Direct stocks
- Corporate bonds
Thus, it is ideal only for conservative investors.
How to Apply for SBI Annuity Deposit Scheme
You can apply offline or online depending on your convenience.
Offline Application Procedure
- Visit your nearest SBI branch.
- Request the “Annuity Deposit Scheme” application form.
- Fill in details such as:
- Deposit amount
- Tenure
- Nominee information
- Submit KYC documents (Aadhaar, PAN, address proof).
- Deposit the amount at the counter.
- Your annuity begins from the next month.
Online Application (SBI Net Banking or YONO)
- Log in to SBI Net Banking or YONO app.
- Go to the Deposit Schemes section.
- Select Annuity Deposit Scheme.
- Enter desired deposit amount and tenure.
- Confirm and make the payment.
- A confirmation message appears immediately.
This is the quickest way to activate the scheme without visiting the branch.
Who Should Avoid This Scheme?
You might not benefit from this scheme if:
- You prefer high-return investment options.
- You need full liquidity or immediate access to your money.
- You fall under a high income-tax slab where interest becomes heavily taxed.
If flexibility and growth are your priorities, alternatives like SIPs, equity mutual funds, or NPS might be better.
Conclusion
The SBI Annuity Deposit Scheme 2025 is one of the most stable and no-risk financial products available for individuals who prefer assured monthly income. It is designed for retirees, homemakers, salaried individuals, and parents who want a predictable and steady cash flow.
Key benefits include:
- SBI’s trust and stability
- Simple application process
- Guaranteed monthly payouts
- Flexible investment tenure
- Higher interest for senior citizens
Although the scheme does not provide high returns like market-linked products, it remains an excellent choice for those who prioritize capital safety and fixed income.
Whether your goal is to manage monthly household expenses, create a pension-like income, or ensure financial stability for dependents, this scheme offers a dependable and stress-free solution.
