SBI ‘Har Ghar Lakhpati’ Scheme: If you are also one of those people who want to add a big amount from small savings, then the ‘Har Ghar Lakhpati’ scheme of State Bank of India (SBI) can be a great option for you. This scheme has been specially designed for the common people so that they can create a fund of lakhs of rupees in a few years by saving a small amount every month. Although this scheme is already running, but recently a small change has been made in it – a slight reduction in interest rates.

Now interest rate cut by 0.20%

SBI has now cut the interest rate of this scheme by 0.20%. This means that the interest you were getting earlier will now be slightly less. Now common citizens will get a maximum of 6.55% per annum and senior citizens will get a maximum of 7.05% per annum. Although the reduction is not very big, it can have a slight impact on long-term savings. Still, the specialty of this scheme is that you can start with a very small amount.

What is SBI’s ‘Har Ghar Lakhpati’ scheme?

This is a recurring deposit (RD) scheme. Now imagine, if you deposit only ₹ 610 every month, then gradually this amount will increase. And after 10 years, when your account matures, you will get a full amount of ₹ 1 lakh or more. The most special thing in this is that this scheme is for those people who cannot invest a large amount at once but can definitely save a little every month. You can understand it like your piggy bank in which you put money every month and over time it becomes a big amount.

The investment time of this scheme ranges from 3 years to 10 years. That is, if you want, you can deposit money only for 3 years or for the whole 10 years. The longer you invest, the better the return you will get.

Who can open an account?

You do not need any major documents or conditions to invest in this scheme. Any Indian citizen can participate in it. If you want, you can open an account in your name alone or you can open a joint account with someone. Even parents can open this account in the name of their children. If the child is 10 years or older and can sign himself, then he can also add his name to the RD. For children younger than this, a joint account can be opened with the guardian.

Will there be tax on interest or not?

Now the question arises whether the interest earned from this RD will be taxed or not? So the answer is a little easier and worth understanding. If your annual interest income from this RD is less than ₹ 40,000, then you will not have to pay any tax. Whereas for senior citizens this limit is up to ₹ 50,000. But if the interest exceeds this, then the bank deducts 10% TDS i.e. tax.

Why is it necessary to submit Form 15G or 15H?

If your total annual income is outside the tax limit, meaning your income is not so much that tax is payable on it, but the interest from RD has exceeded ₹40,000 (or ₹50,000 for senior citizens), then you can tell this to the bank. For this, you have to fill and submit Form 15G (for general citizens) or Form 15H (for senior citizens). In this, you give details of your income and declare that your income does not come under the tax bracket, so the bank should not deduct TDS. This form has to be submitted every year.

Big benefit from small investment

If seen, this scheme of SBI is very good for those people who want to save money little by little. By depositing a small amount like ₹610 every month, when you create a fund of ₹1 lakh after 10 years, it is very useful. Whether it is children’s education, small household expenses or money for any other need – this scheme is beneficial everywhere.

So if you too are dreaming of becoming a millionaire, that too without much risk, then this scheme of SBI can be a good step for you. A big treasure is created from small savings – this is the real Desi wisdom.