To avail the benefit of making one-time lump sum payments and in return getting the similar Equated Monthly Installments (EMIs), many financial institutions are providing the depositors with Annuity Deposit Scheme. However, the installments contain a segment of principle amount along with the interest rate on the reducing principal amount which are compounded at quarterly rests and then discounted to the monthly value. The payment has to be made after the one month anniversary following the deposit date. In case where the date is non-existent like 29th, 30th and 31st of any month, then at the 1st day of the following, the payment has to be made.
For acquiring the Annuity Deposit Scheme, the individual has to be an Indian citizen. On the other hand, the Non-Resident Ordinary and Non-Resident External Savings Account holders are not eligible.
| Account Type | Term Deposit Account (Single) / Special Term Deposit Account (Joint) |
| Deposit Amount | Deposit Amount Different bank provides with different deposit amount. For example, SBI annuity deposit account depending on the minimum annuity is Rs 1,000/-. However, Rs 25,000/- is the minimum deposit amount, and there is no limit set for the maximum deposit. |
| Interest Rate | The rate of interest is levied based on the tenure opted by the depositor. SBI provides with the highest returns of 7.5% and lowest returns of 5.25%. The senior citizens can avail additional 0.5% on their deposits. |
| Period | Different bank provides with different tenures and is basically between 1,2,3,4,5,6,7 and 10 years. It is necessary for a depositor to opt for a suitable tenure. |
| TDS | Under section 80C of Income Tax Act, 1961, tax benefits can be availed. |
| Loan against the scheme | Not every bank provides with the facility of loan against annuity deposit scheme. |
| Nomination (if any) | For joint accounts, you can nominate more than one individual whereas; single account holders can only nominate a single person. (NOTE: - The nomination facility is only available in some cases) |
Below given list comprise of the interest rates for the customers with the deposit amount of Rs 1 Crore:
| Tenors | Existing rate (Public) | Revised for Public w.e.f 05.10.2015 | Existing rate (Senior Citizens) | Revised rate for Senior Citizens w.e.f 05.10.205 |
| 7 days to 45 days | 5.50% | 5.25% | 5.75% | 5.50% |
| 46 days to 179 days | 6.75%< | 6.50% | 7% | 6.75% |
| 6 Months to 210 days | 7% | 6.75% | 7.25% | 7% |
| 211 days to 1 Year | 7.25% | 7% | 7.50% | 7.25% |
| 1 Year to 455 days | 7.5% | 7.25% | 7.75% | 7.50% |
| 456 days to 2 Years | 7.75% | 7.50% | 8% | 7.75% |
| 2 years to 3 years | 7.75% | 7.50% | 8% | 7.75% |
| 3 years to 5 years | 7.25% | 7% | 7.50% | 7.25% |
| 5 years to 10 years | 7.25% | 7% | 7.50% | 7.25% |
Kindly Note: The rate of interest mentioned is subject to change according to bank’s liquidity requirements and market conditions.
