The State Bank of India (SBI), India’s largest public sector bank, has introduced a unique initiative called Har Ghar Lakhpati, a recurring deposit (RD) scheme designed to help individuals and families achieve their financial goals. This scheme ensures that depositors can accumulate ₹1,00,000 or more over a tenure of three to ten years, making it an attractive option for those seeking disciplined savings and guaranteed returns.
But is this scheme worth your investment? Let’s break down the details, benefits, and potential drawbacks of the Har Ghar Lakhpati RD scheme.
What Are the Key Features of SBI’s Har Ghar Lakhpati Scheme?
Who Can Invest?
The scheme is open to:
- Adults of all age groups.
- Minors (under guardianship).
Flexible Tenures
The scheme allows depositors to choose a tenure ranging from 1 year (12 months) to 10 years (120 months), making it versatile for various financial goals, from short-term expenses to long-term investments.
Attractive Interest Rates
- For Adults (<60 years): 6.75% for tenures of 3–4 years.
- For Senior Citizens (≥60 years): 7.25% for tenures of 3–4 years.
- The interest rates align with SBI’s regular RD rates for other tenures (6.50% for general citizens and 7% for senior citizens).
Guaranteed Returns
The scheme ensures capital protection and guaranteed returns, making it a secure option for risk-averse investors.
What Are the Pros of SBI’s Har Ghar Lakhpati Scheme?
- Secure Investment: Unlike market-linked investments, this RD scheme provides guaranteed returns without any risk of capital loss.
- Disciplined Savings: The monthly deposit structure promotes financial discipline, encouraging consistent savings.
- Customizable Tenures: Choose a tenure that suits your financial plans, whether it’s for a dream wedding, children’s education, or a vacation.
- Higher Interest for Seniors: Senior citizens enjoy a better rate of return (7.25% for 3–4 years), making it ideal for retirees seeking stable income.
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Are There Any Drawbacks to Consider?
- Lock-In Period:
- Minimum lock-in of 3 years.
- Premature withdrawals incur penalties:
- 0.50% for amounts up to ₹5 lakh.
- 1% for amounts above ₹5 lakh.
- Interest rates also drop by 0.5–1% on premature withdrawals.
- Lower Returns Compared to Equity:
- While secure, the returns are lower compared to equity-linked investments like mutual funds.
- Long-term goals like retirement or higher education might be better served by higher-yield investments.
- No Interest for Short Tenures:
- RDs held for less than seven days earn no interest, reducing flexibility for extremely short-term goals.
Who Should Invest in Har Ghar Lakhpati?
This scheme is ideal for:
- Conservative Investors: Those who prefer guaranteed returns over market-linked risks.
- First-Time Investors: Students or beginners looking to develop a habit of disciplined saving.
- Senior Citizens: Retirees seeking stable income with assured returns.
- Short to Medium-Term Goals: Perfect for planning weddings, vacations, or purchasing appliances.
Expert Insights: Should You Invest?
According to Nehal Mota, Co-Founder & CEO of Finnovate, the Har Ghar Lakhpati scheme ensures capital safety and promotes savings. However, its lower returns compared to equity investments might not meet the needs of long-term investors.
Verdict: This scheme is ideal for risk-averse investors or those planning short-to-medium-term goals. If you’re looking for higher returns, exploring mutual funds or equity investments might be a better option.
FAQs
What is the Har Ghar Lakhpati scheme?
It’s a recurring deposit scheme by SBI designed to help individuals save ₹1,00,000 or more over a tenure of 3–10 years with guaranteed returns.
What are the interest rates offered under the scheme?
- 6.75% for general citizens (3–4 years).
- 7.25% for senior citizens (3–4 years).
Can minors open an account under this scheme?
Yes, minors can invest under the guardianship of an adult.
What is the minimum lock-in period for the scheme?
The minimum lock-in period is 3 years. Withdrawals before this period incur penalties.
Are the returns taxable?
Yes, interest earned on RDs is taxable as per your income tax slab.
Can I withdraw prematurely?
Yes, but premature withdrawals will incur a penalty of 0.50–1% and a reduction in the applicable interest rate.
Who should invest in this scheme?
Conservative investors, senior citizens, and first-time investors looking for secure and disciplined savings options.
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