Everything About SBI MIS Scheme – Monthly Income, Benefits & How It Works

 Introduction to SBI MIS Scheme

 What is the SBI Monthly Income Scheme (MIS)?

The SBI Monthly Income Scheme (MIS) is a fixed deposit plan offered by the State Bank of India, specifically designed for individuals seeking a regular monthly income. Unlike typical fixed deposits where interest is paid at maturity, this scheme ensures a steady flow of interest income every month, making it ideal for retirees, senior citizens, or conservative investors who prefer financial stability over high-risk returns.

Under this scheme, you deposit a lump sum for a fixed tenure, and in return, SBI pays you the interest earned every month directly to your savings account. At the end of the tenure, the principal amount is returned, making it both safe and predictable. While the capital stays intact during the term, your investment earns you consistent monthly earnings — without having to worry about market fluctuations or economic volatility.

This scheme is part of SBI’s term deposit offerings but differs by focusing more on regular income flow rather than wealth accumulation. It’s also important to note that the principal is non-withdrawable until maturity (except with penalties), which makes it more disciplined for long-term income planning.

In short, SBI MIS is like renting out your money to the bank, and in return, you get a monthly "rent" in the form of interest.

Why is it Popular Among Investors?

The popularity of the SBI MIS Scheme isn’t accidental—it’s earned its reputation for being trustworthy, stable, and investor-friendly. One major reason is the credibility and reliability of SBI, the largest public sector bank in India, which gives confidence to even the most cautious investors.

Here are a few reasons why it’s a preferred choice:

• Guaranteed Monthly Returns: In uncertain times, having a fixed amount credited to your account each month is a huge relief.
• Zero Market Risk: It’s not linked to equities or mutual funds, so there’s no fear of losing money due to market crashes.
• Ideal for Senior Citizens: Older investors often rely on pensions and need predictable income—this scheme fits the bill perfectly.
• Simple to Understand: There’s no jargon or complex calculations. You invest a lump sum, and SBI gives you monthly payouts. Simple as that.
• Customizable Investment Amounts: You can start with a relatively low amount (subject to the minimum threshold) and scale up depending on your needs.

Moreover, the MIS is also seen as a good middle-ground investment. It’s more rewarding than a traditional savings account but safer than equities or mutual funds. For those who want passive income without sleepless nights, it strikes the perfect balance.

Features of SBI MIS Scheme

Fixed Monthly Income

The biggest selling point of the SBI MIS Scheme is its promise of fixed monthly income, regardless of market conditions. Once you deposit the lump sum, SBI commits to paying you a fixed amount every month, based on the prevailing interest rate at the time of your deposit.

Let’s break this down with an example:

• Suppose you invest ₹10 lakhs under the scheme at an interest rate of 7.10% p.a.
• The annual interest would be ₹71,000.
• This translates into a monthly income of ₹5,916.67 (approximately), credited directly to your account.

This predictability is highly beneficial for planning household expenses, EMIs, or even leisure spending. You know how much you’re getting and when — no guesswork involved.

Another important aspect is that the principal remains untouched throughout the tenure. So, you’re essentially earning without depleting your invested capital. This is very useful for retirees who wish to preserve their savings while generating consistent cash flow.

Also, monthly interest credits happen automatically, meaning you don’t need to manually withdraw or visit a bank branch. It’s effortless income at its best.

Tenure and Investment Limits

The SBI MIS Scheme generally comes with a fixed tenure of 5 years (60 months). This long-term nature helps in better financial planning and offers a good compromise between liquidity and income.

Here’s what you need to know:

• Minimum Deposit: Usually starts from ₹1,000 or ₹10,000, depending on branch policy.
• Maximum Limit: There’s no publicly declared upper limit for individuals, but branches may cap deposits at ₹15 lakhs to ₹50 lakhs for MIS schemes depending on FD type.
• Joint Accounts: You can invest higher amounts if you open a joint account (ideal for family members or spouses).
• Auto-Renewal Option: At maturity, you can choose to reinvest the principal amount or withdraw it. Some branches also allow automatic renewal at the prevailing interest rate.

In terms of flexibility, once you choose the tenure, your monthly income is fixed based on the interest rate at that point. However, premature withdrawals are discouraged and come with penalties, so it’s best to invest only that portion of funds that you won’t need urgently.

Safety and Security of Investment

With countless investment schemes flooding the market, safety is one of the top priorities for most people—and rightly so. Fortunately, with SBI MIS, safety is almost a guaranteed feature.

Here’s why it’s considered one of the safest investment options:

• Backed by SBI: Being India’s largest bank and a government-owned entity, SBI carries a high degree of trust and financial strength.
• Not Market-Linked: Your returns are not affected by stock market crashes, inflation, or recession.
• Principal Protection: Your invested amount is protected and returned to you in full upon maturity.
• Interest Payment Guarantee: Monthly interest payments are made diligently, without delay, adding to the scheme’s reliability.

Moreover, deposits with SBI are insured under the DICGC (Deposit Insurance and Credit Guarantee Corporation) scheme up to ₹5 lakhs per depositor, per bank. While this limit might not cover large deposits entirely, the backing of a public sector bank like SBI provides peace of mind to investors.

Who Can Invest?

The SBI Monthly Income Scheme is open to a wide range of individuals, making it an accessible and inclusive investment option. Whether you're a working professional, a retiree, or even a business owner looking to park surplus funds, this scheme can suit your needs.

Here’s a detailed breakdown of eligible investors:

·       Resident Individuals: Any Indian citizen who resides in the country can invest in the scheme, provided they fulfill KYC norms.

·       Senior Citizens: Individuals above 60 years of age are not only eligible but may also receive a slightly higher interest rate, making it even more attractive.

·       Minors (via Guardian): Investments can be made in the name of a minor with a parent or guardian managing the account.

·       Joint Account Holders: Two or more individuals can open a joint account and pool in funds, which is ideal for couples or family members.

·       HUFs (Hindu Undivided Families): In some cases, HUFs are also eligible to invest under this scheme.

·       NRIs: Non-Resident Indians (NRIs) are generally not allowed to invest in regular domestic MIS accounts. However, they can explore NRO fixed deposits with monthly payouts, which function similarly.

Aadhar card, PAN card, passport-size photographs, and proof of address are typically required to initiate the investment. All applicants must complete Know Your Customer (KYC) formalities as per RBI guidelines.

In essence, SBI MIS is meant for anyone who wants regular, risk-free income, especially suitable for those who don't want to get entangled with volatile investment markets or confusing financial products.

Minimum and Maximum Deposit Requirements

To ensure accessibility, SBI has set a relatively low bar for entry while also offering flexibility for higher investments. Here's what you should know about the deposit limits:

Minimum Deposit:

·       For most SBI MIS accounts, the minimum deposit starts at ₹1,000 or ₹10,000, depending on the type of deposit.

·       It must be in multiples of ₹1,000 thereafter.

·       This makes it very easy for small investors to get started.

Maximum Deposit:

·       There’s no explicitly stated upper limit in public documents, but most branches follow a practical maximum limit of ₹15 lakhs for single deposits.

·       Joint accounts may allow higher limits, sometimes extending to ₹50 lakhs, depending on internal policies.

·       The actual amount you can deposit may also vary slightly depending on whether it’s a regular FD, a tax-saver deposit, or a specific scheme like SBI Annuity Deposit (which closely resembles MIS).

If you’re planning a larger investment, it's advisable to speak to the bank directly and explore breaking up the amount into multiple FDs for better management and insurance coverage.

Important Tip: Since DICGC insures deposits up to ₹5 lakhs per person, per bank, splitting your investments across different banks or in different names within the family can be a smart move for added safety.

How the SBI MIS Scheme Works

Step-by-Step Process to Open an Account

Opening an SBI MIS account is a straightforward process, whether you're an existing customer or a new one. Here’s a step-by-step guide to get started:

1.     Visit Your Nearest SBI Branch:

o   While online banking is available for FDs, it’s best to open an MIS scheme in person, especially if it's your first time.

2.     Fill Out the FD Application Form:

o   Mention that you're opening a Monthly Interest Payout FD.

o   Provide personal and nominee details.

3.     Submit Required Documents:

o   Aadhar card

o   PAN card

o   Passport-sized photographs

o   Proof of address (utility bill, bank statement, etc.)

o   Existing bank account number (for monthly interest credit)

4.     Choose Investment Amount and Tenure:

o   Choose the lump sum you want to invest.

o   Select tenure—usually 5 years for MIS schemes.

5.     Opt for Monthly Payout Option:

o   While filling the form, opt for monthly interest payout, not quarterly or cumulative.

6.     Get FD Receipt and Account Details:

o   Once processed, you'll receive the FD receipt mentioning all terms and the monthly interest amount.

7.     Monthly Interest Credit Begins:

o   Interest will be credited to your linked savings account on a fixed date each month, depending on the date of FD initiation.

The entire process typically takes less than 30 minutes, and the staff will assist you if you’re unsure at any step.

Interest Calculation Method

Understanding how interest is calculated is crucial to know how much you’ll receive every month. SBI uses a simple interest formula for monthly payouts, and here’s how it works:

Formula:

Interest = (Principal × Rate × Time) / 100

However, for monthly payouts, the interest is calculated on an annual basis and then divided into 12 equal parts to provide a consistent monthly income.

Example:

·       Principal: ₹10,00,000

·       Annual Interest Rate: 7.10%

·       Interest Per Year = ₹71,000

·       Monthly Payout = ₹5,916.67

A few key points:

·       The interest rate is locked in at the time of deposit.

·       Compounding is not applicable, as interest is paid out, not reinvested.

·       There’s no fluctuation in payouts—every month, you get the same amount.

Note: For tax purposes, interest earned above ₹40,000 (₹50,000 for senior citizens) in a financial year is subject to TDS (Tax Deducted at Source).

Interest Payout Schedule

Once you’ve made your deposit, SBI ensures that your monthly interest is credited on a fixed day every month. This consistency makes it easier to plan your expenses.

Here’s what you can expect:

·       Fixed Monthly Payout Date: Usually aligned with the date of the FD opening. For example, if you opened the account on the 10th, your interest will be credited around the 10th of every month.

·       Direct Credit to Savings Account: The interest is deposited into your linked savings account automatically—no need to visit the bank or initiate manual transfers.

·       Holiday Adjustment: If your payout date falls on a Sunday or a bank holiday, the amount is usually credited on the previous working day.

This schedule helps you plan your financial obligations — be it EMIs, utility bills, or daily expenses — as you can rely on a consistent income flow each month.

For elderly investors or homemakers who depend solely on this income, the timely and fixed nature of payouts is a key benefit, offering both convenience and peace of mind.

 SBI MIS Scheme Interest Rates (Latest 2025 Update)

Current Interest Rates

As of August 2025, the current interest rates for the SBI MIS Scheme are as follows:

Category	Interest Rate (p.a.)	Monthly Payout (₹10 Lakhs)
Regular Citizens	7.10%	₹5,916.67
Senior Citizens	7.60%	₹6,333.33

Note: These rates are subject to change as per SBI’s internal policies and RBI directives.

SBI updates its FD and MIS interest rates periodically based on inflation trends, repo rates, and other macroeconomic factors. It’s always a good idea to check the latest rate before making a fresh investment.

These interest rates make MIS a competitive offering compared to other traditional options like post office MIS or corporate FDs.

Historical Rate Trends

Interest rates offered under SBI MIS have seen changes over the years, usually influenced by the RBI’s repo rate and inflationary pressures.

Here’s a quick overview of the trend in the past five years:

Year	Regular Rate	Senior Citizen Rate
2021	5.40%	5.90%
2022	5.50%	6.00%
2023	6.20%	6.70%
2024	6.90%	7.40%
2025	7.10%	7.60%

The upward trend since 2023 reflects RBI's tightening of monetary policy to control inflation, which has benefited depositors.

Factors Affecting Interest Rate Changes

Several key factors determine how and when SBI adjusts interest rates on its MIS offerings:

1.     RBI Repo Rate: A higher repo rate usually leads to higher deposit interest rates.

2.     Inflation Trends: When inflation is high, banks raise deposit rates to attract savers.

3.     Liquidity in the Banking System: Excess liquidity often results in lower deposit rates, and vice versa.

4.     Government Policies: Financial reforms or new government-backed savings schemes can influence interest adjustments.

5.     Market Competition: Rates from competitors like HDFC, ICICI, and the Post Office can lead SBI to tweak its own rates.

As an investor, it’s essential to lock in higher rates during rising cycles to maximize your monthly income.

 Conclusion

The SBI Monthly Income Scheme (MIS) is one of the most reliable, low-risk investment options available for individuals seeking a steady and predictable source of income. Whether you're a retiree looking to support your post-retirement life or a conservative investor seeking stability, this scheme offers the perfect blend of security, simplicity, and steady returns.

What makes this scheme so appealing is its fixed monthly income payout, hassle-free management, and the backing of a trusted public sector bank like SBI. You don’t have to worry about market volatility, changing stock prices, or complex financial jargon. Once you invest, the interest flows into your account like clockwork—month after month—ensuring peace of mind and financial predictability.

The scheme’s flexibility in investment amount, competitive interest rates, and suitability for various investor profiles further add to its attractiveness. Plus, the process to open an MIS account is simple, straightforward, and accessible to all—whether you're opening it as an individual, jointly with a spouse, or even in the name of a minor.

In today’s uncertain economic environment, finding an investment that offers guaranteed returns without exposing your principal to risk is rare. SBI MIS stands out as a perfect fit for income-focused planning, especially for those who value safety and regularity over high but risky returns.

So, if you’re looking for a passive income stream without the headache, SBI MIS could very well be the cornerstone of your financial strategy.

FAQs

 Q1: Can I open multiple SBI MIS accounts?

Yes, you can open multiple MIS accounts, but the combined deposit across all should ideally remain within the bank’s permissible limits for fixed deposits.

Q2: Is the monthly interest taxable under SBI MIS?
Yes, the interest earned is taxable as per your income tax slab. If the total interest exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year, TDS will be applicable.

Q3: Can I break my MIS deposit before maturity?
Yes, premature withdrawal is allowed but comes with a penalty—usually a 0.50% to 1% reduction in the applicable interest rate, depending on how early you break it.

Q4: Is SBI MIS better than a Post Office MIS?
Both are safe and government-backed, but SBI offers slightly more flexibility in tenure, customer service, and potentially better interest rates. However, the best option depends on your location, banking preference, and service accessibility.

Q5: How will I receive the monthly interest from SBI MIS?
The monthly interest is directly credited into your linked SBI savings account on a fixed date every month, making it a convenient and automated process.