SBI flexi deposit scheme is different from recurring one - Know how and check benefits
With SBI flexi deposit scheme, you can decide to vary your instalment amount and even the number of monthly submissions, within the Annual sum defined.
Among some traditional investment schemes offered by banks are savings accounts, fixed deposits and recurring deposits. Each and every scheme is different from the other, but recurring deposits scheme has an advantage of earning interest rates like FDs with little installments every month. But how would you feel, if you can decide your own monthly installments at a bank, where you can still enjoy the rates of fixed deposits? That would be definitely an icing on your cake. But this is exactly what the largest lender State Bank of India (SBI) is offering to its customers with their Flexi Deposit scheme.
Even though both recurring deposits and flexi deposits have similarities, the difference is that the former allows single fixed installments every month. While in the latter, SBI states that, you can decide to vary your instalment amount and even the number of monthly, within the Annual sum defined.
The SBI’s Flexi deposit scheme targets lower income class, by helping them make small investments and still earn the benefit of fixed deposits.
In SBI’s Flexi deposit scheme, a customer can make minimum Rs 500 installments every month, whereas minimum Rs 5,000 is allowed in a financial year. There are maximum 10 installments allowed in a year. It is not necessary, one has to opt for just Rs 5,000 yearly deposits, SBI allows maximum Rs 50,000 deposits in a year.
That means, if you plan to invest minimum Rs 5000 every year, you can decide on any number of deposits in a month at any time. The target will be Rs 5,000 only. Same goes for Rs 50,000 in a financial year. This gives maximum flexibility to an individual.
This investment can be opted for a minimum tenor of 5 years, and maximum 7 years. Rate of interest is compounded on a quarterly basis.
Considering the rate of interest on SBI’s Flexi deposit is same like FDs, a person will get 6.85% rate on this new scheme for tenure between 5 years to 7 years. Senior citizen will enjoy much higher benefit, as the interest is set at 7.35% for the tenure.
SBI also allows premature withdrawal, however, the proceeds will be given 0.50% below the rate applicable for the period the deposit has remained with the Bank.
However, if anytime a person defaults in making installments, SBI will levy Rs.50/- per Financial Year as penalty.
There is nomination facility available. Also, loan against this deposit is allowed.