If you invest in Fixed Deposits (FDs), there’s news that might interest you. The rules for FDs could be changing soon.
Currently, banks offer FDs for up to 10 years. However, Suryoday Small Finance Bank plans to extend this period to 20 years.
This change is expected to introduce new options, including a systematic withdrawal plan.
New FD Scheme: How It Compares to Annuities
If the new plan is implemented, it will work similarly to annuity plans offered by insurance companies, but for a fixed period.
According to the MD and CEO of Suryoday SFB, the bank will soon launch FDs with more than 10 years of tenure.
This is beneficial for long-term savings and will allow you to take advantage of compounding interest.
Monthly Withdrawals and Comparison with SBI Scheme
With this new FD plan, you could receive Rs 1 lakh every month. The bank is still finalizing the details, including interest rates.
For example, if you save Rs 50,000 every month for 10-11 years, you might be able to withdraw Rs 1 lakh each month afterward.
Experts suggest that FD interest rates may be based on government 10-year bonds.
Currently, only SBI offers a similar scheme, where you deposit a lump sum and receive monthly payments with interest.
Suryoday SFB’s plan will differ: you will deposit money monthly for the first few years, then receive monthly payouts.
This approach is different from SBI’s scheme, which is structured in the opposite way.
