The senior citizens need to consider their risk profile, liquidity and tax slab before investing in any fixed-income investments.

Special FD Scheme Senior Citizen: The four leading commercial banks — State Bank of India (SBI), Bank of Baroda, ICICI Bank and HDFC Bank — have introduced special fixed deposit schemes for the benefit of senior citizens. While the regular FD schemes offer an additional 0.5 per cent interest to the depositors who are above age 60, the special FD schemes for senior citizens provide an additional rate of interest.

Before we look at what SBI, Bank of Baroda, ICICI Bank and HDFC Bank are offering on their special and exclusive FD schemes for senior citizens, here are some common things about them:

1. Last date

The special FD scheme will only be available to senior citizens till September30, 2020.

2. Tenure

The special FD scheme interest rate will only apply to deposits of 5 years and above till 10 years.

3. Types of FD

The special FD scheme is applicable on fresh deposit and also on renewal of any maturing deposits.

4. For whom

Importantly, the scheme is only available to resident citizens and is not applicable to Non-Resident Indian.

State Bank of India (SBI)

The special FD scheme of SBI is called ‘SBI Wecare’ and offers an additional interest of 30 basis points i.e. 0.3 per cent per annum. This is in addition to 0.5 per cent which the senior citizen gets on regular FDs.

So, the additional interest rate to senior citizen is effectively 80 basis points higher than regular FD rate. Post the deduction of TDS, the interest can be received on monthly or quarterly basis.

The interest rate on SBI Wecare is 6.2 per cent per annum on deposits between 5-year and10-years.

ICICI BANK

The special fixed deposit (FD) scheme for senior citizens of ICICI Bank is called ‘ICICI Bank Golden Years FD’ and offers 80 basis points (bps) more than what is applicable to general public (non-senior citizens) for the same deposit amount and tenor.

Effective June 16, 2020, the interest rate on ICICI Bank Golden Years FD is 6.30 per cent per annum on deposits between 5-year and 10-years.

Bank of Baroda

In the current challenging situation brought by COVID-19, Bank of Baroda is offering an additional rate of 100 bps on deposits to Senior Citizens.

The interest rate on Bank of Baroda FD for senior citizens is 6.30 per cent per annum on deposits between 5-year and10-years.

HDFC Bank

The special fixed deposit (FD) scheme for senior citizens of HDFC Bank is called Senior Citizen Care FD and offers an additional rate of 0.25% over and above the existing rate of 0.50 per cent per annum. The interest rate on HDFC Bank’s Senior Citizen Care FD is 6.75 per cent per annum on deposits between 5-year and10-years.

Premature closure of Fixed Deposit

In case one wishes to close the FD prematurely, generally, there is a lower rate of interest paid to the depositors. Know it from the bank before booking the FD with any bank. In the case HDFC Bank FDs, in a premature closure of Senior Citizen Care FD prior to 5 years, the interest rate will be 1% below the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower. In case of premature closure of Senior Citizen Care FD post 5 years, the interest rate will be 1.25% below the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower.

Senior citizens may also consider other alternate investment options such as Pradhan Mantri Vaya Vandana Yojana (PMVVY), Post office monthly income scheme (PO MIS), Senior Citizen Savings Scheme (SCSS). The senior citizens need to consider their risk profile, liquidity and tax slab before investing in any fixed-income investments.