What is Annuity
An annuity is a financial product designed to provide a steady stream of income, typically used as part of a retirement strategy. Here's a detailed breakdown of what an annuity is and how it works
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Presentation Transcript
What is Annuity ? What is Annuity ? Basically, it is the largest lender in the nation, State Bank of India (SBI), provides an investment product called the SBI Annuity Deposit Scheme in response to rising interest rates. Investors must deposit a lump sum and can earn monthly annuity instalments that include a portion of the principal amount as well as interest.
Features of Annuity Tenture of deposit : The programme is offered in four distinct terms. The options for investors are 36, 60, 84, or 120 months. Minimum and maximum deposits: For the applicable term, a minimum deposit of INR 1,000 per month is required. Therefore, the minimum deposit for the SBI Annuity Deposit Scheme for a 5 year term is INR 60,000. The maximum investment sum is unrestricted, though. Interest rate: The scheme's interest rate will be comparable to SBI's term deposit interest rates. Senior citizens might also receive a higher rate on their deposits. Account opening: This programme is available at all SBI branches. In any SBI branch, investors can open a single or joint account. Payment of an annuity: Starting from the date of deposit, annuity payments begin one month later. The payment will be made on the first of the next month if the payment date falls on a nonexistent date, such as the 30th or 31st. Nomination process: Only available for individual use. Investors may borrow up to 75% of the balance of their annuity as an overdraft or loan. The loan will only be approved in exceptional circumstances, though. In addition, if the loan is approved, the subsequent annuity payment will only be placed into the loan account. Transferability: SBI annuity accounts can be moved easily across branches. Premature withdrawals are only permitted at the branch where the account was first opened and only in the event of the investor's passing.
