A monthly income plan enables investors with zero risk tolerance to generate a regular fixed income with guaranteed returns at a predetermined interest rate every month till maturity. For investors, especially the older ones, the smartest way to enhance their personal finances and get a secondary source of income is the monthly income scheme, where the relevant interest will be paid at the end of each month starting from the day on which the interest is paid. The day the account was opened. , For individuals seeking high returns with adequate liquidity, the comparison between SBI Annuity Deposit Scheme and Post Office Monthly Income Scheme is given below.
SBI Annuity Deposit Scheme
Customers can deposit a lump sum amount in a lump sum SBI Annuity Deposit Scheme, which is a monthly income plan, and receives repayment in the form of annuity payments which include both principal and interest. The maturity period of this deposit scheme can be 36, 60, 84 or 120 months. Residents and minors can open SBI Annuity Deposit Scheme individually or jointly. This annuity scheme will be subject to the rate of interest applicable on fixed deposits. SBI last revised interest rates on its fixed deposits on June 14, 2022, and on SBI annuity deposit scheme for tenors of 36, 60, 84 or 120 months, the bank currently offers an interest rate of 5.45% – 5.50% is promising. 6.30% for senior citizens and 5.95% for general public.
As for making monthly annuity payments, SBI on its website states that “Payment of annuity on the anniversary date following the month of deposit. If that date does not exist (29, 30 and 31), the same shall be paid in the next month.” on the first date.” Additionally, nominations are allowed on behalf of an individual, and the plan includes an overdraft or loan facility that offers up to 75% of the account balance. For deposits up to Rs 15,00,000, premature withdrawal is allowed, but with a penalty as will be applicable to fixed deposits, and premature payment is allowed without restriction in the event of death of the depositor.
Post Office Monthly Income Scheme Account (MIS)
A single adult can open a Post Office Monthly Income Scheme Account (MIS) as well as a joint account with three other adults, a guardian on behalf of a minor or a person of unsound mind, and a minor above the age of 10 years to open the account. The minimum deposit amount required is 1000 and in multiples of 1000. The maximum investment limit is INR 4.5 lakhs for a single account and INR 9 lakhs for a joint account. The Post Office MIS scheme has a taxable interest rate of 6.6% per annum (no additional benefit for senior citizens), payable on a monthly basis, starting from the day of account opening and continuing till the maturity period of 5 years.
When the account reaches its maturity date, which is five years from the date of opening, it can be closed. If the account holder dies before the maturity of the account, the deposit amount will be paid to the nominee or legal heirs. No deposit can be prematurely withdrawn earlier than one year from the date of expiry of the deposit. Premature withdrawals made before the third year attract a 2 per cent penalty after the first year of account opening, and 1 per cent penalty by the post office for withdrawals made after the third year but before the fifth year. It can be clearly seen that the Post Office Monthly Income Scheme Account (MIS) is offering higher interest rate along with the same benefits as compared to SBI Monthly Income Scheme.
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