Info Guide: State Bank Of India Investment Plans

investment

State Bank of India is one of the most popular banking institutions operating in the country. Not only as a banking institution but SBI Life is also one of the biggest Life insurance companies of India. This is a joint venture between the largest bank of India SBI along with the leading global insurance company BNP Paribas Cardiff. SBI Life Insurance has honed their skills in presenting the investment instruments and insurance solutions for the general public across the country. 

SBI Life Insurance is offering a host of investment plans belonging to domains including child care plans, pension plans, health insurance, life insurance, motor insurance, financial savings plans, investments.

SBI Investment Plans

  1. SBI Fixed Deposit

This is considered to be the most popular investment plan of the State Bank of India. This age-old multinational public sector bank is especially known for its popularity among millions of customers. The organisation offers various types of FD investment schemes depending on the variable financial needs of the customers, FD being considered as one of the most popular, safe and secured investment options. 

There are several variants of SBI FD plans:

  1. SBI Term Deposit Scheme
    Under this scheme, you are eligible to freely choose the maturity tenure ranging between 7 days and 10 years. Minimum investment value is INR 1,000. Premature withdrawal and loan facilities are available in this scheme.
     
  2. Tax saving SBI Fixed Deposit Plan
    Under this scheme, the investment period is 5 years with the maximum limit for investment is INR 1.5 lakhs. However, premature withdrawal or loan against the FD is not permissible here.
     
  3. SBI Fixed Deposit Reinvestment Plan
    The maturity tenure ranges between 6 months to 10 years. The minimum amount for investment is INR 1,000 and the interest-earning can be reinvested into that particular scheme for enhanced generation of interest. FD loans and foreclosure facilities are applicable here.
     
  4. SBI Multi Option Deposit
    This is a unique combination of FD as well as a savings account. Partial withdrawal is permissible, while the remainder value continues to earn interest at the same rate of interest. The maturity period ranges from 1 to 5 years. The minimum amount of investment is INR 10,000.
  5. SBI Annuity Deposit
    With a lump-sum investment, the payout is regulated through EMI or Equal Monthly Instalments. The tenure period can be 36 months, 60 months, 84 months or 120 months while the minimum amount of investment is INR 25,000. Premature withdrawal is permissible only if the investor dies.

Advantages and features of SBI Fixed Deposit:

The features and benefits of SBI Fixed Deposit are as follows:

  • The investors can enjoy earning a lump-sum interest after maturity
  • Nomination facility is applicable here; spouse, children or other beneficiaries can be added as nominees
  • Competitive interest rates
  • Auto-renewal facility is applicable
  • The senior citizens enjoy a slightly elevated rate of interest than the standard schemes

Eligibility criteria of SBI Fixed Deposit:

For being an investor under SBI FD scheme, you must be: 

  • Resident individuals
  • Minors with legal guardian or parent(s) as co-signatories
  • NRIs with NRO/NRE account
  • Partnership firms
  • HUF members
  • Clubs, agencies, societies
  • Sole proprietorship business
  • Charitable and educational institutions

Documents required for SBI Fixed Deposit:

The relevant documents essential for SBI FD investment are as follows:

  • Photo identification document—PAN card/ Aadhaar card/Passport/ Driving License/Voter ID
  • Resident proof—Aadhaar card/Passport/Driving License/utility bills (recent)
  • Age proof for senior citizens and minors—senior citizen ID/birth certificate/matriculation certificate etc.
  • Bank account details along with a cheque
  • Recent passport size photographs
  1. SBI Recurring deposit:

A Recurring Deposit is an investment product wherein you are required to pay a certain fixed amount of money every month towards your regular deposit portfolio instead of lump-sum like a Fixed Deposit. Otherwise, it works exactly like a fixed deposit.

The recurring deposit is a very popular investment instrument with the SBI. An RD can be from 12 months to 120 months. Loan facility is also available on SBI Recurring Deposits. However, there is no tax advantage. The interest earned on a recurring deposit is taxable.

  1. SBI PPF:

Public Provident Fund offered by State Bank of India is again one of the most popular investment instruments of the SBI. A public provident fund is a tax-efficient investment option wherein the investment gets tax benefits upto INR 1.5 lakhs under section 80C at the time of investing and the maturity benefit is also tax-free. The entire tenure of investment is 15 years. 

Investment RiskSovereign
Return GuaranteeThe Rate of interest is declared by the Government every 3 months. The current rate is 7.1%
CompoundedAnnually
Investment Tenure15 years, extended up to 5 years on maturity
Tax StatusEEE

Eligible for 80C investment upto INR 1.5 lakhs at the time of investing
Maturity is tax-free
Issued byState Bank of India
Amount of investmentThe minimum investment is INR 500 while the maximum limit is INR 1.5 lakh p.a.
LiquidityMaximum 25% loan can be taken from the 3rd financial year onwards while partial withdrawal can be done after 6th financial year
  1. SBI Life Investment Plans
    The State Bank of India also has a varied range of life insurance policies which form a part of its investment plans. This is offered by SBI Life Insurance Company Limited. There are principally three categories in this context :
    1. Endowment Plans
      Endowment Plans are traditional insurance plans with a return guarantee. SBI Life offers 5 types of endowment plans such as
      1. SBI Life-Smart Future Choices Plan
        This is a flexible protection plan with a cash bonus and survival benefits. It is ideal for high net worth individuals. It is a profit endowment assurance plan, providing savings, income as well as insurance coverage under a single plan
      2. SBI Life Smart Platina Assure Plan
        This is an individual non-linked non-participating endowment assurance plan. it assures guaranteed returns along with the benefit of premium payment for a limited period. There are guaranteed additions with a monthly mode facility.
      3. SBI Life-Shubh Nivesh Plan
        This is a very popular whole life insurance endowment plan as well as a savings plan. This is a with-profit endowment assurance plan providing insurance coverage, savings as well as income under a single plan.
      4. SBI Life Smart Bachat Plan
        This is a traditional endowment plan with limited-term for premium payment. It is a participating plan with wise savings options.
      5. SBI Life-Smart Humsafar Plan
        This is an individual non-linked participating life insurance savings product. you can avail both the benefits of insurance coverage as well as savings under this single policy scheme.

         
    2. Money-Back Plans:
      This is also a type of endowment plan but with money back schedule. Hence this plan is called Anticipated Endowment Plans. The money-back plans of SBI include:
      1. SBI Life-Smart Money Back Gold Plan
        Through this investment plan, you are eligible to enjoy the dual benefits of periodic income along with life insurance coverage for meeting crucial financial turn points. It is a very popular traditional money back plan. Total survival benefits of 110% of the sum assured is one of the major highlights of this plan along with discounts on large sums assured.
      2. SBI Life- Smart Money Planner
        This is a traditional money back income plan ensuring regular income along with insurance coverage benefits. The premium payment option is also simple with a single limited-time payment. The reversionary bonuses are also simple along with life insurance coverage throughout the policy term. 
      3. SBI Life Smart Income Protect Plan
        This is a traditional Smart income participating plan ensuring the twin benefits of regular income flow for 15 years along with life coverage. There are three rider options with simple reversionary bonuses.
         
    3. Unit Linked Insurance Plans
      These are market-linked insurance plans with investment opportunity provided to the customer based on his asset allocation. The ULIPs offered by SBI are: 
      1. SBI Life-eWealth Insurance Plan
        This is an automatic asset allocation that helps in asset growth. The simplified 3-step online buying procedure makes it all the more popular. there are dual benefits of secured life coverage along with market-linked returns.
         
      2. SBI Life-Smart InsureWealth Plus Plan
        This savings scheme ensures disciplined savings of the investor with assured wealth creation along with the flexibility of Systematic Monthly Withdrawal. Under this scheme, there are 3 investment strategies and 9 funds. The morality charges are returnable. Starting from the 6th year of investment, partial withdrawal is applicable.
         
      3. SBI Life-Saral InsureWealth Plus Plan
        This is a unit-linked plan with regular investment options with multiple funds. This scheme offers flexibility along with Systematic Monthly Withdrawal. You can choose from 8 different fund options along with loyalty additions and partial withdrawal opportunities.
         
      4. SBI Life-Smart Wealth Builder Plan
        This is an enhanced investment unit-linked scheme with guaranteed additions. There are multiple funds under this scheme for the benefits of the investors. The premium payment options are also flexible and ensure life coverage. Partial withdrawals are permissible after the completion of the 6th year from the start of the investment.
         
      5. SBI Life-Smart Wealth Assure Plan
        This is a single premium life cover unit-linked plan ensuring market-linked returns. it is quite helpful for creating a healthy wealth corpus, especially in the long run. Moreover, you can enjoy the returns that will be in sync with the contemporary market investment conditions. 
         
      6. SBI Life Smart Elite Plan
        This scheme has been specially crafted for the High Net-Worth Individuals. This scheme ensures maximisation of the savings through market-linked returns and ensures effective better management of your investment portfolio. There is a wide range of funds available here with flexible premium payment options and twin protection cover options.
         
      7. SBI Life Smart Privilege Plan
        This scheme has been specially crafted for the UHNIs for wealth creation. There are 11 funds available for free switching and unlimited redirections as per requirements. Insurance coverage can also be enjoyed under this investment option. 
  2. SBI Mutual Funds

The State Bank of India also offers mutual funds through SBI Asset Management Company. There are many mutual funds offered by SBI AMC. Mutual Funds are one of the best forms of investment and need to be a part of one’s portfolio.

Some of the SBI Mutual Fund schemes wherein you can invest through a SIP or a lump sum is listed below for your convenience:

Fund NameFund Objective
SBI Small & Midcap fundBuild long-term capital gains for the investor
SBI Magnum Multi-cap FundDesigned to maintain the balance between the high growth potential factor and the related risk
SBI ETF Nifty Next 50 FundHelps in earning considerable gains even during bull market conditions
SBI Magnum Tax Gain FundOffers tax exemption benefits under Section 80C along with corresponding capital enhancement
SBI Magnum Children’s Benefit PlanActively managed equity portfolio, supplemented by regular earning opportunity through investment in debt and money market instruments
SBI Contra FundDiversified portfolio enabling the investors to enjoy long-term capital appreciation


Investing in SBI through SIP (Systematic Investment Plan)

However, the systematic investment plan is one of the most effective ways of investing in mutual funds. It inculcates and encourages the habit of regular savings thus curtailing the tendency of unnecessary expenditure. Depending on your financial horizon and status you can choose the duration.

The working procedure of SIP is similar to that of a bank RD. Therefore, as you begin investing in SBI SIP, the investment capital declared by you gets deducted from your respective bank account on a particular date. The specified amount then gets invested into the SBI mutual fund scheme as per your choice. 

Advantages and features of SBI SIP

The benefits and features of SBI SIP are as follows:

  1. Flexible investment tenure

There is no concept of maximum tenure under SBI SIP scheme. Moreover, you are also free to change the maturity date even after the scheme has already begun functioning for you. Most of the mutual fund schemes are managed by SBI Mutual Fund AMC. The minimum number of SBI SIP can be 6 months.

  1. Flexible investment value

As SBI SIP has been specifically designed to encourage small but regular payments therefore, the investment amount can be as low as INR 500 per instalment. This sort of flexibility is one of the most highlighting factors for its popularity.

  1. Rupee cost averaging 

The price of the individual units purchased for the fund and the average NAV remains equal based on the date on which the investment was initially made under the rupee cost averaging system. Therefore, there is no need to assess the market performance for gaining optimum returns under this scheme.

Disciplined investment pattern

SIP encourages and incorporates the habit of disciplined investment thus strengthening the overall wealth corpus. 

  1. Long-term compounding benefit

The earlier the investments are made, the more time it receives to grow thus making the overall wealth corpus stronger over time. SIP calculator is an important tool in making correct assessments and calculations under this context.

SBI Investment Options

There are many investment instruments offered by the State Bank of India. However, the more popular ones have been listed here for your quick reference. SBI also offers all government schemes like NPS, Senior Citizen Savings Account, Sukanya Samridhi, RBI bonds, etc. along with savings accounts and stock investing options. However, you need to choose the plan which best suits your requirements according to your financial goals based on your risk profile and asset allocation. 

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