The latest scheme at the State Bank of India (SBI) allows almost anybody to plan an investment scheme whereby even small moneys of just 250 rupees monthly can be converted into a sizeable corpus realization of 17 lakh in later years. The very basis for this scheme is the creation of wealth through the concept of saving in a disciplined manner and the power of compound interest for the small investor.
SBI Special Scheme: An Insight Into Its Working
In brief, we may say that this investment scheme works in a way that the second from SBI Recurring Deposit and Public Provident Fund are most recommended long-term savings schemes with attractive interest rates. A small investment of 250 rupees monthly could lead to a massive sum build-up over 20 to 25 years thanks to compound interest and tax benefits.
The ₹250 Turned into ₹17 Lakh
So let us first understand the functioning of this scheme:
- Investment Amount: ₹250 monthly (₹3,000 annually)
- Investment Tenure: 25 years
- Interest Rate: Approximately 7.1%, in the case of PPF, revised quarterly,
- Total Amount Invested: ₹75,000 over 25 years
- Maturity Value: Approx. ₹17 lakh inclusive of compound interest
So this scheme gives such a big return due to compound interest, which takes infinitesimal amounts and multiplies those to be large amounts a long way down the road.
Advantages Of This SBI Scheme
- Small investment, big returns: Investors shall, for only ₹250, have a long time horizon for investments to really help create quite a sizeable corpus.
- Safe and Secure: Being a government-sponsored scheme, the likes of PPF and RD-from the SBI are safe in all respects.
- Tax Benefits: Investment made in PPF falls under tax deduction as per Section 80C of the Income Tax Act.
- Guaranteed Returns: These schemes guarantee fixed returns, unlike other market-linked investments.
- Flexible Deposits: The investor can increase amounts of their monthly contributions any time, opting for maximum returns.
Who Should Invest?
- Long-term wealth creation
- Young professionals planning for retirement savings
- Parents making savings for children’s education and marriage
- Those wanting low risk with high returns in an investment
Conclusion
The aforementioned SBI special scheme shows that small but regular investments can meaningfully contribute to the great wealth that can be built over time. Investing just 250 rupees each month in a PPF account or into an SBI RD can work wonders to build 17 lakh with almost no risk involved. Thus, this scheme remains a safe and guaranteed bet for returns.
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