State Bank of India (SBI), recently announced a special fixed deposit scheme for senior citizens called, SBI 'WECARE' Senior Citizens' Term Deposit scheme. The special FD scheme for senior citizens has been made available for investment from 12 May 2020. "The scheme has been launched to provide a higher interest rate to senior citizens in the current falling interest rate scenario," SBI said.
Here are the main features of this newly-launched SBI special fixed deposit scheme for senior citizens:
1) Eligibility
Only resident senior citizens aged sixty years and above are eligible to invest in SBI special FD scheme, which has been introduced to protect the income of senior citizens by providing additional interest on their fixed deposits.
2) Type of deposit
SBI Wecare Deposit has been introduced in the retail term deposit segment to safeguard the interests of senior citizens in the current falling rate regime.
3) Tenure of deposit
A fixed deposit investment under ‘SBI Wecare Deposit’ can be made for a minimum of five years and a maximum of 10 years.
4) Interest Rate
SBI special FD scheme for senior citizens will fetch 80 basis points (bps) interest rate above the rate applicable to the general public. The bank has cut the interest rates on term deposits with effect from 12 May. After the latest revision, SBI gives 5.7% interest rate on five years FD for the general public. If a senior citizen puts a fixed deposit under the special FD scheme, then interest rate applicable to the FD will be 6.50% "Under this new product, an additional 30 bps premium will be payable for senior citizens' retail term deposits with "5 years & above" tenure only," the bank noted
5) Payment of interest
Interest on fixed deposits under this special FD scheme for senior citizens will be paid on maturity. As per SBI's website, interest, net of TDS, shall be credited to customer account. For senior citizens, TDS will be deducted if the total interest in a financial year exceeds ₹50,000.
6) Loan Facility
A senior citizen can take a loan against the special fixed deposits.
7) Scheme availability
A senior citizen can invest in the scheme by visiting a SBI Bank branch. Existing customers of SBI can also place the FD through net banking or SBI Yono app.
8) Scheme validity
The scheme which opened on 12 May 2020, and September 30, 2020.
9) Premature withdrawal
This additional interest i.e. 30 bps under the special scheme for senior citizens will not be payable in case of premature withdrawal of such deposits. Therefore, if you opt for premature withdrawal of a FD under the scheme, your fixed deposit investment will fetch only 6.20% i.e. 50 bps above the general customers.
10) Others
SBI special FD scheme for senior citizens is available on fresh deposit and renewal of maturing deposits.
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