SBI or Post Office Monthly Income Scheme: Which is Profitable?

An investor with zero tolerance for risk can generate a regular fixed income with guaranteed returns through a monthly income plan, but at a predefined rate of interest until maturity. Given that it guarantees interest payments each month, this is a better investment choice for certain investors, such as retirees who have a very low tolerance for risk.

Today we will talk about the monthly income plans of SBI Annuity Deposit Scheme and Post Office Monthly Income Scheme to know which is better.

SBI Annuity Deposit Scheme

Customers who participate in this monthly income scheme can pay a one-time large amount and get repayment in the form of annuity payments that include both interest and principal. A deposit's maturity length maybe 36, 60, 84, or 120 months. Both residents and minors are eligible to open an SBI Annuity Deposit Scheme. The bank is now providing an interest rate of 5.45 percent to 5.50 percent for the general public and 5.95 percent to 6.30 percent for senior people on term deposits due on June 14, 2022, and on SBI Annuity Deposit Scheme for a period of 36, 60, 84, or 120 months.

Post Office Monthly Income Scheme Account (MIS)

An MIS account can be opened by one person on their own or by a maximum of three people. The account must be opened with a minimum deposit of Rs. 1000 and in multiples of Rs. 1000.

For a single amount, the maximum investment limit is Rs. 4.5 lakh, and for a joint account, it is Rs. 9 lakhs. With a taxable annual interest rate of 6.6 percent, the India Post MIS or post office MIS Scheme is payable each month beginning on the day the account is opened and continuing until the maturity term of 5 years.

The account may be closed when it reaches its maturity date, which is five years after the date of opening. The deposit amount will be given to the nominee or the account holder's legitimate heirs if they die away before the account reaches maturity. No deposit may be withdrawn until the year has passed from the date of deposit.

Premature withdrawals made before the third year are subject to a 2% penalty after the first year of account establishment, while withdrawals made after the third year but before the fifth year are subject to a 1% post office penalty.

Conclusion

Post Office Monthly Income Scheme Account (MIS) offers better benefits and a greater interest rate than SBI Monthly Income Scheme.