State Bank of India or SBI offers many lucrative schemes for investors looking for low-amount, risk-free, high-return investment options. There are two types of investors, one that wants a large sum corpus return once in a while, and the second who desires a constant flow of monthly income on a side basis through investments. And for both of them, SBI offers its Annuity deposit scheme and Fixed Deposit Schemes. Let’s understand the basic difference between these two.

SBI FD Scheme Vs SBI Annuity Deposit Scheme
The interest rate offered to both the SBI FD scheme investor and the SBI annuity deposit scheme investor is the same as per the relative tenure. So, the main difference between investing in these two is focused on when the maturity amount is disbursed to the investor. Thus, after investing in SBI FD schemes, an investor will have to make a one-time large deposit to get the principal amount and interest with it after a certain tenure chosen by him or her. Whereas in SBI Annuity Deposit Scheme, after the investor had made a one-time deposit, then a part of the principal amount along with the interest is paid to him or her in monthly equated instalments or EMIs at the frequency chosen at the time of investment.
Most people are familiar with how the FD works, but the SBI Annuity Scheme needs more clarification. So, here reads the statement from SBI’s official website about its annual investment plan, “Under this scheme, a lump sum amount is deposited by a customer which is repaid to the customer over a period in equated monthly instalment which comprises part of principal amount and interest on the reducing principal amount as well. Using the scheme, a customer can have a fixed monthly amount against his one-time deposit. Payment will start on the anniversary date of the month. If the date is non-existent (29th, 30th and 31st), it will be paid on the 1st day of next month”.
Moreover, about the difference between FD and the Annuity Deposit scheme of SBI, the information on the official website reads, “In Fixed Deposit account customer makes one-time Deposit and receives the maturity amount at maturity date which comprises principal and interest in case of STDR and principal only in case of TDR as interest is paid at a periodic interval. Annuity Deposit accepts one-time Deposit and the amount is repaid to the customer over the tenor selected by him/her, along with interest, in equated monthly instalments.”
Also read:
SBI, HDFC Bank, Know The Latest FD Rates After Second Hike
Minimum Deposit Limit For SBI Annuity Deposit Scheme
If you want ₹1,000 monthly for 5 years then you will have to invest a minimum ₹60,000. You will get the principal amount and interest on it over time in EMIs.