SBI Annuity Scheme Beats FD? Earn Around ₹20,000 Monthly on ₹10 Lakh

Kokila Chokkanathan
The sbi Annuity Deposit Scheme has recently gained attention as an alternative to traditional Fixed Deposits (FDs), especially for people looking for regular monthly income instead of a lump sum return.

What Is the sbi Annuity Deposit Scheme?

The sbi Annuity Deposit Scheme is a special type of deposit offered by the bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW">state bank of india where you:

  • Invest a one-time lump sum amount
  • Receive monthly payouts (EMI-style)
  • Each EMI includes both interest + a portion of your principal
Unlike an FD, where interest is paid separately (or quarterly/monthly if chosen), this scheme gradually returns your entire investment over time.

How It Works

Here’s the simple structure:

You deposit a lump sum (example: ₹10 lakh)

SBI calculates monthly instalments based on:

interest rate (linked to FD rates)

tenure (3, 5, 7, or 10 years)

You receive fixed monthly payouts

By the end of tenure, your entire principal is fully returned in installments

₹10 Lakh Example: Monthly Income Explained

Based on typical calculations:

  • Investment: ₹10,00,000
  • Interest rate: ~6.5%–7.5% (varies by tenure)
  • Tenure: ~5 years (60 months)
Expected monthly payout

👉 Around ₹19,000 – ₹20,000 per month

This is why headlines say:

“Earn ₹20,000 monthly from ₹10 lakh investment”

However, this is not pure “profit”.

Important Reality: It Is NOT Extra Income

A key point many miss:

Your ₹20,000/month includes:

  • Interest earnings
  • PLUS repayment of your own ₹10 lakh principal
So unlike FD interest, this scheme:

  • Does NOT preserve your full capital
  • Slowly returns your principal every month
By the end of the tenure:
👉 Your ₹10 lakh becomes zero (because it is fully repaid in parts)

SBI Annuity Scheme vs Fixed Deposit (FD)

Fixed Deposit (FD)

  • You get only interest monthly/quarterly
  • Principal remains safe and intact
  • You get full lump sum at maturity
Annuity Scheme

  • You get higher monthly cash flow
  • But principal is gradually returned to you
  • No lump sum at the end
Is It Really Better Than FD?

It may be better if:

  • You want fixed monthly income like pension
  • You are retired or need regular cash flow
  • You prefer stability over capital growth
FD is better if:

  • You want your full money intact
  • You want flexibility and liquidity
  • You want to reinvest or grow wealth
Key Features of sbi Annuity Scheme

  • Tenure: 3, 5, 7, 10 years
  • Safe (backed by SBI)
  • Loan facility available (up to ~75%)
  • Interest rate similar to FD rates
  • No market risk
Final Takeaway

The claim “₹10 lakh gives ₹20,000 monthly” is technically true, but:

👉 It is not extra income like FD interest
👉 It is a combination of interest + your own principal repayment

Simple conclusion:

  • FD = wealth preservation + interest
  • Annuity = monthly income + capital depletion over time
 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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