Screenshot of Investments Home Page State Bank of India

Investments are one of the key components of a wealth building strategy, however, not everyone is inclined to the risk associated with these products. Those who are able to take on some risk will find that careful alignment with a financial adviser or investment specialist goes a long way.There is also a fair amount of education available, however, those who are not familiar with investments should seek help from those who are qualified. State Bank of India Investments provides customers with a few different options to exercise their investment needs. This review sets out to determine whether they rank among some of the best in the world.

A bank that understands the importance of great investment options, is Deutsche Bank. We recently did a full review.

About State Bank of India

State Bank of India
Screenshot of State Bank of India Home Page

A rich history in a diverse culture sets the foundation for this bank. Founded over 200 years ago on Calcutta, it was originally known as the Bank of Calcutta. As the economic policies changed and different regions required assistance, many of the banks merged. This allowed the bank to enjoy a greater footprint over the country and also reach the rural areas. State Bank of India enjoys a massive asset hold which exceeds its closest competitor four times.

DBS Bank also performs well despite not falling into the European or American Big Banks. Read the full review to learn more.

Key Factors to Bear In Mind When Investing

Although investments are supposed to provide returns greater than inflation and internal bank savings accounts, there is always a level of risk to carry. Customers should familiarize themselves with the restrictions and limitations of investments before they get themselves into it.

The Different Levels of Risk

Investment risk ranges from very low risk right up to very high risk. The way this is determined is by the level of exposure to funds easily affected by market volatility. The more susceptible to market risk, the higher the risk rating. This is because customers are more open to partial or total loss of funds. Even the very low-risk investments carry some form of risk. Customers who prefer not to have any risk at all should request funds with a guarantee.

The Conditions of the Guarantee

Just because an investment has a guarantee, doesn’t mean that the guarantee covers the capital and growth. Within the bank, there are savings accounts often classified as investments, however, carry no risk. They guarantee the capital and the return, which means customers often know the outcome of their investment. Investments outside the branch which involves funds, shares, securities, and more may also offer guarantees. These could include up to 80% to 100% of the capital invested, a percentage of the return at its cap, and more. Customers would need to choose the one that best suits their circumstances.

Investment More Than Money

Investment strategies that promise high returns in a short amount of time usually also involve substantial risk. These get-rich-quick options often fall under scams and investors are reminded to tread lightly. The best investment strategy often involves one where patience is part of the equation. The usual term for an investment is at least 5 years.

State Bank of India Investments Product Offerings

Screenshot of Investment Options State Bank of India

These investments are offered internally through State Bank of India, and we are unable to determine whether there is risk or not.

SBI Tax Savings Scheme, 2006

This investment is suitable for Indians in the capacity of the Karta of the Hindu undivided family. Furthermore, they also need an Income Tax Permanent Account Number (PAN).

  • Customers are required to put down a minimum deposit of Rs 1,000 or multiples thereof.
  • There is an annual cap of Rs 150,000.
  • Furthermore, customers can open a Term Deposit account or a Special Term Deposit account.
  • The minimum term is 5 years and the maximum 10 years.
  • Also, customers enjoy a competitive interest rate.
  • Finally, premature withdrawal is not permitted before the end of the term.

Reinvestment Plan

This option is ideal for those who wish to experience the effect of compound interest. This is because the interest only pays out at maturity.

  • Customers can invest online or by visiting a branch.
  • The minimum opening deposit for the account is Rs 1,000.
  • Furthermore, the interest is compounded quarterly.
  • Also, the term of the investments ranges from 6 months to 10 years.
  • Customers are able to make premature withdrawals, however, penalties may apply.
  • There is also a loan or overdraft facility available of up to 90% of the investment.
  • Finally, customers have access to a nomination facility, and auto renewal takes place if maturity instructions aren’t given.


An SBI Multi Option Deposit Scheme is linked to a savings or current account. Furthermore, this type of term deposit earns the term deposit rates applicable at the time of the initial deposit.

  • Customers can open their account through the online banking facility or through the branch.
  • There is a minimum term deposit of Rs 10,000 and multiples of Rs 1,000 thereafter.
  • This account carries no maximum deposit amount.
  • Furthermore, customers enjoy competitive interest rates.
  • Also, the minimum loan period is 1 year and the maximum 5 years.
  • Premature withdrawals are allowed, however, certain conditions apply.
  • Finally, customers also have access to a loan facility.

Recurring Deposit

Customers who don’t necessarily have a lump sum readily available may find the recurring deposit the ideal fit. Furthermore, this allows them to build up their wealth over a period of time.

  • There is a minimum monthly deposit of Rs 100 in multiples of Rs 10.
  • Also, the minimum period of investment is 12 months and the maximum 120 months.
  • Customers enjoy a competitive interest rate.
  • Loans and overdrafts of up to 90% of the investment amount are available.
  • Premature withdrawals are allowed, however, conditions apply.
  • Furthermore, nomination facilities are available.
  • Finally, passbooks are issued on the account.

SBI Holiday Savings Account

This account is the ideal solution for those who don’t want to incur a lot of debt for the sake of going on vacation. This investment provides ideal conditions for funds to grow in anticipation of the holiday.

  • This investment savings account is in association with Thomas Cook India.
  • Customers will also have access to vacation packages exclusively for SBI Holiday Savings Account customers.
  • The savings work in accordance with the holiday package a customer selects. The package amount is divided into 13 installments, of which, Thomas Cook funds one installment.
  • Finally, once the final installment is paid, customers can go on their holiday.

Annuity Deposit Scheme

Customers who have a lump sum and which to receive a monthly income from it should consider this option. The Equated Monthly Installments comprise of a part of the principal amount as well as the interest on the reducing principal amount. Furthermore, the interest is compounded at quarterly rests with the monthly value discounted.

  • The minimum deposit should be Rs 25,000., with monthly installments of at least Rs 1,000.
  • There is no maximum limit on the account.
  • Also, the tenure on this investment is 36, 60, 84, or 120 months.
  • Customers enjoy a competitive interest rate.
  • Premature payment is only available in the case of the death of the depositor.
  • Finally, overdrafts or loans of up to 75% of the balance amount of the annuity may be granted in special circumstances.

SBI Flexi Deposit Scheme

This account is similar to the recurring fixed deposit account, however, a few changes make this a little more flexible. Customers can vary their installment amount and the number of monthly installments within the annual sum defined.

  • The account can be opened online or through a branch.
  • There is a minimum opening deposit of Rs 500, with a maximum of Rs 50,000 per annum. Also, customers can make a maximum of 10 deposits per annum.
  • Customers can make any number of deposits in a month and at any time.
  • Furthermore, customers enjoy a flexible interest rate.
  • The account also provides quarterly compound interest.
  • The minimum tenor is 5 years and the maximum is 7 years.
  • Conditions apply to premature withdrawals.
  • There is a penalty charge of Rs50 for non-deposit of monthly installments per financial year.
  • Customers enjoy both the option to nominate and access to loan facilities.
  • Finally, a passbook is available on the account.

SBI Capgains Plus (Capital Gain Scheme 1988)

Customers who sell a property that accumulated in value may be subject to capital gains tax. When customers wish to use the funds again within the allocated timeframe to purchase another property, they can park the funds off in an account specifically designed for this purposes.

  • With this account, customers are eligible to claim exemption of Long Term Capital Gains Tax on sale of capital assets.
  • Customers will also have enough time to look for an asset that suits their needs.
  • They will also earn interest on the account as they wait.
  • There are certain eligibility requirements to fulfill.
  • Furthermore, customers choose between savings bank accounts and term deposits.
  • There is a minimum opening deposit of Rs 1,000 should customers opt for the term deposit. There is no maximum, however.
  • The deposit cannot exceed 2 to 3 years from the date of transfer of the original asset.
  • Finally, customers enjoy competitive interest rates.

Consumers should also read up on the savings accounts on offer at State Bank of India.

Critical Reviews Rating State Bank of India Investments – 7 of 10

Screenshot of Some Features of Term Deposit State Bank of India

The bank considers these internal investments. However, other banks across the world might consider them savings instead. However, many banks across the world differentiate between their internal and external investments. 

These investments provide customers with numerous offers and even special benefits, apart from offering competitive interest rates. There is no telling whether there is any risk involved with these investments, however, internal investments often don’t carry any risk (apart from total bank failure).

Consumers have some pretty neat options here, however, we would like to see a bit of diversity in the form of stock and shares, funds, and other types of investment portfolios.

There are a number of reasons why transparency and product information is important. Read why these aspects affected Citibank's investment options.