Last reviewed: 10 October 2026. Rates and rules checked against SBI’s official Annuity Deposit Scheme page and its retail domestic term deposit rate card.
The SBI annuity deposit scheme lets you put in one lump sum and get it back as equal monthly instalments that carry both principal and interest, so the balance runs down to zero by the end of the term. It is State Bank of India’s answer for people who want a predictable monthly cash flow without buying an insurance annuity or locking money into a post office product. SBI pays the same rate as its regular term deposits, and the current card has been in force since 15 December 2025. The RBI raised the repo rate to 5.50% on 7 October 2026, but SBI had not posted a fresh retail card when we checked, so the rates below pre-date that hike.
SBI annuity deposit scheme: key facts
| Feature | What SBI offers |
|---|---|
| Interest rate | Same as the term deposit card rate for the chosen tenure (6.30% for 36 months, 6.05% for 60 to 120 months, general public, w.e.f. 15 December 2025) |
| Minimum deposit | Whatever amount produces a monthly annuity of at least ₹1,000 |
| Maximum deposit | No upper limit |
| Tenure | 36, 60, 84 or 120 months |
| Payout | Monthly instalment of principal plus interest, starting the month after you deposit |
| Premature withdrawal | Allowed for deposits up to ₹15 lakh, with the normal term deposit penalty; no limit on the death of the depositor |
| Loan facility | Overdraft or loan up to 75% of the balance annuity, in special cases |
| Tax treatment | Interest portion taxable at your slab rate; TDS applies above the threshold |
| Who it suits | Retirees and anyone who wants a fixed monthly income for 3 to 10 years |
Current SBI annuity deposit interest rates
SBI does not publish a separate annuity rate table. Its product page says the scheme pays the rate applicable to term deposits, so the card for retail deposits below ₹3 crore is the reference.
| Annuity tenure | Matching card bucket | General public | Senior citizens |
|---|---|---|---|
| 36 months | 3 years to less than 5 years | 6.30% | 6.80% |
| 60 months | 5 years up to 10 years | 6.05% | 7.05%* |
| 84 months | 5 years up to 10 years | 6.05% | 7.05%* |
| 120 months | 5 years up to 10 years | 6.05% | 7.05%* |
Source: SBI retail domestic term deposit rates, effective 15 December 2025. *SBI’s card says the 7.05% senior figure includes a 50 basis point premium under SBI We-care on top of the usual senior benefit. The annuity page does not say whether We-care is extended to annuity deposits, so confirm the senior rate at the branch before you book.
How SBI works out the instalment
Interest is compounded quarterly and then discounted to a monthly figure. Each instalment repays a slice of principal and pays interest on the reducing balance. The instalment is credited on the same date of the following month; if that date does not exist (29th to 31st), it is paid on the 1st of the next month.
Worked example: what ₹1 lakh and ₹5 lakh pay each month
We converted the quarterly rate to a monthly rate with i = (1 + r/4)^(1/3) minus 1, then used the standard annuity formula, instalment = P × i ÷ (1 minus (1 + i)^(minus n)). At 6.05%, the monthly rate is about 0.5016%.
| Deposit | Tenure | Rate | Monthly instalment | Total received | Interest earned |
|---|---|---|---|---|---|
| ₹1,00,000 | 36 months | 6.30% | ₹3,054.32 | ₹1,09,955 | ₹9,955 |
| ₹1,00,000 | 60 months | 6.05% | ₹1,934.20 | ₹1,16,052 | ₹16,052 |
| ₹5,00,000 | 60 months | 6.05% | ₹9,670.99 | ₹5,80,260 | ₹80,260 |
| ₹5,00,000 | 120 months | 6.05% | ₹5,555.99 | ₹6,66,718 | ₹1,66,718 |
| ₹5,00,000 (senior) | 60 months | 7.05% | ₹9,902.72 | ₹5,94,163 | ₹94,163 |
Flip the question and the scheme becomes a planning tool. To receive ₹10,000 a month for five years, you would need to deposit about ₹5,17,010 at 6.05%, or about ₹5,04,912 at 7.05%.
Tax impact in the first year
On the ₹5 lakh, 60 month example, only the interest part is income. In the first 12 months it adds up to roughly ₹27,687, while about ₹88,365 of principal comes back to you tax free. Someone in the 30% slab would owe about ₹8,306 (plus cess) on that first year’s interest, and the taxable amount shrinks each year as the balance falls.
Pros and cons of the SBI annuity deposit scheme
Pros
- A fixed monthly credit that does not change for the whole tenure, even if SBI cuts rates later.
- No upper limit, unlike the capped post office schemes.
- Can be opened at any SBI branch and moved between branches; a universal passbook replaces the deposit receipt.
- Loan or overdraft available in special cases, up to 75% of the balance annuity.
Cons
- Your capital is returned in pieces, so nothing is left at maturity. Plan for that.
- Rates for 5 to 10 years (6.05%) are lower than SBI’s 2 to 3 year bucket.
- Government schemes such as SCSS currently pay more for those who qualify.
- Premature closure is capped at deposits of ₹15 lakh, except on death.
Rules and charges
Premature withdrawal follows SBI’s general term deposit penalty rules, in force since 1 April 2017: 0.50% for deposits up to ₹5 lakh and 1% for deposits above ₹5 lakh and below ₹1 crore. The penalty is taken off the rate applicable for the period the money actually stayed with the bank, or off the contracted rate, whichever gives the lower figure. If a loan is sanctioned, subsequent instalments are diverted to the loan account until it is cleared. Nomination is allowed, but only in favour of an individual.
Eligibility and documents
Resident individuals, including minors, can open the account singly or jointly. You will need standard KYC documents (PAN, Aadhaar or another officially valid address proof, and a photograph) plus a linked SBI savings account where the instalments will be credited.
Tax and TDS
The interest component of every instalment is taxable at your slab rate in the year it accrues. Banks deduct TDS once your total deposit interest at that bank crosses ₹50,000 in a year, or ₹1 lakh for senior citizens. If your income is below the taxable limit, submit Form No. 121 under section 393(6) or 393(7) of the Income-tax Act, 2025, which replaces Forms 15G and 15H. Bank deposits, including annuity deposits, are covered by DICGC insurance up to ₹5 lakh per depositor per bank, principal and interest combined.
How it compares
| Option | Rate | Payout | Capital at the end | Limit |
|---|---|---|---|---|
| SBI annuity deposit, 5 years | 6.05% (7.05% senior with We-care) | Monthly, principal plus interest | Nil | No cap |
| SBI FD, 5 to 10 years | 6.05% | Monthly or quarterly interest only | Full principal returned | No cap |
| Post Office Monthly Income Scheme | 7.4% (Oct to Dec 2026) | Monthly interest only | Full principal returned | Capped |
| Senior Citizens’ Savings Scheme | 8.2% (Oct to Dec 2026) | Quarterly interest | Full principal returned | ₹30 lakh, age 60+ |
Post office rates are from the Department of Economic Affairs notification covered in our report on small savings rates for October to December 2026. For SBI’s full card and other buckets, see our SBI FD interest rates page.
Our verdict
The SBI annuity deposit scheme works best for someone who wants to spend down a corpus on a fixed schedule, for example to bridge the years between retirement and pension, or to fund school fees for a known period. If you want your capital back intact, a regular FD with monthly interest or the post office options above do a better job. Seniors should first use up their SCSS limit, which pays more, and then look at the annuity deposit for any surplus. Because the repo rate has just gone up, it may be worth waiting a few weeks to see whether SBI revises its card before locking in a long tenure. Our scoring approach is explained on our how we rate deposits page.
How to open an SBI annuity deposit
Visit any SBI branch with KYC documents, choose the tenure and the monthly instalment you want, and fund the deposit from your savings account. Read the full terms on SBI’s official Annuity Deposit Scheme page before you sign.
FAQs
What is the minimum amount for the SBI annuity deposit scheme?
SBI sets no fixed rupee minimum. The deposit must be large enough to produce an annuity of at least ₹1,000 a month for the tenure you choose.
Which interest rate applies to an SBI annuity deposit?
The term deposit card rate for the matching tenure: 6.30% for 36 months and 6.05% for 60 to 120 months for the general public, effective 15 December 2025.
Can I close an SBI annuity deposit early?
Yes, for deposits up to ₹15 lakh, with the usual term deposit penalty. On the depositor’s death, early payment is allowed without any amount limit.
Is the monthly annuity fully taxable?
No. Only the interest part of each instalment is taxable. The principal part is your own money coming back.
Will the RBI repo hike change my annuity?
Not for an existing deposit. The rate is fixed on the day you book. A revised SBI card would only affect new deposits.
This article is for informational purposes only and does not constitute investment advice.
