India’s largest government-owned bank, State Bank of India (SBI), has introduced a new recurring deposit (RD) scheme called ‘Har Ghar Lakhpati.’ This scheme helps individuals save a small amount every month and earn ₹1 lakh or more over time. Through this article, we will explore all the details about this scheme.

Key Features of the ‘Har Ghar Lakhpati’ Scheme

The ‘Har Ghar Lakhpati’ scheme is ideal for individuals who want to save a fixed amount every month and earn interest on their deposits. It offers flexible tenures ranging from 3 to 10 years.

Eligibility:

This scheme is open to everyone, including children above the age of 10. If the child is unable to sign, a parent or legal guardian can open the account on their behalf.

How Does This Scheme Work?

In this scheme, customers deposit a small amount every month for a fixed tenure. The total amount at maturity starts from Rs 1 lakh. The monthly installment depends on the chosen tenure:

  • For example, if you deposit Rs 2,500 every month for 3 years, you will get Rs 1 lakh at the end.
  • If you choose a longer tenure like 10 years, the monthly deposit comes down to Rs 591.
  • The monthly installment is calculated based on the interest rate at the time of account opening.

Interest Rate and Tax Benefits

The interest rate for this scheme varies depending on the type of customer:

  • General customers: Up to 6.75%
  • Senior citizens: Up to 7.25%
  • SBI employees and senior citizen employees: Up to 8%

TDS (Tax Deducted at Source) will be applicable on the interest earned, as per income tax rules.

Advantages and Disadvantages of the Scheme

Advantages:

Partial Payments: You can make partial payments if required.

Disadvantages:

  • Late Payment Penalty: There is a penalty of ₹1.50 to ₹2 for late payments, depending on the delay.
  • Account Closure: If you miss 6 consecutive installments, your account will be closed, and the outstanding amount will be transferred to your savings account.

How to Open an Account?

To open an account under the ‘Har Ghar Lakhpati’ scheme, visit the nearest SBI branch. You will need to submit the required documents and select the maturity amount and tenure, and based on your selection, the bank will calculate the monthly installments.

The ‘Har Ghar Lakhpati’ scheme provides an easy and flexible way to save money over time. With attractive interest rates and the option to start with low monthly installments, it is a great choice for anyone looking to build their savings.