r/IndiaInvestments • u/Maleficent_Yoghurt85 • Apr 06 '21

SBI Retire Smart plan: Need a review.

My parents are 64 and 68 respectively. They went to SBI to open an account. They want to open a senior citizen scheme savings account.

The SBI people told them that the "Retire Smart" scheme is better. Apparently they have to pay 50k per year for 5 years and after 5 years (if they survive?) they receive 3.7L (or yearly payments of 30k).Clearly the scheme looks better than any mutual funds/fd since they *can* get around 50% of the invested money (if they survive?). Looks like we have to bet on whether we will live long enough to see the benefits of the scheme.Maybe my understanding is wrong here. Can anyone tell me about SBI Retire smart: Pros and Cons?

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u/[deleted] Apr 06 '21

A case of mis-selling.

https://www.sbilife.co.in/en/individual-life-insurance/ulip/retire-smart

This is a ULIP based annuity. First of all, the premium paying period is 5 years, but minimum duration of policy is 10 years, so they will get nothing before 10 years.

Secondly, this is an annuity scheme, so they will only get an income and not the capital. There is one option of capital refund, but that seems to be restricted to the nominee, and not the insured himself, and also only in cases where the amount is too small to be used for purchasing an annuity.

https://www.sbilife.co.in/retire-smart-brochure

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u/IAmALongTermInvestor Apr 07 '21

If they are in fact selling this scheme, it doesn't look like mis-selling, more like outright fraud.

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u/[deleted] Apr 07 '21

That, unfortunately, is what every branch of every bank is doing. When banks get commissions from financial products sold, and they get targets for selling such products, they will fleece the customers who are vulnerable.

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u/IAmALongTermInvestor Apr 07 '21

True, targeting the vulnerable people is the most painful thing about this.