Senior citizens special FD scheme, all you need to know.

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Over the past few weeks, banks have announced special fixed deposit (FD) schemes for senior citizens that came with higher interest rates.

SBI was the first Indian bank to announce a special Fixed Deposit scheme for senior citizens called SBI We Care. Later, HDFC Bank and ICICI Bank also announced similar deposit schemes for seniors as Senior Citizen Care FD and Golden Years FD respectively. The key highlights of special Fixed Deposit schemes of the three banks are
  • SBI’s We Care special deposit scheme provides an additional 30 basis points interest to senior citizens
  • ICICI Bank’s ‘Golden Years FD’, offers senior citizens an interest rate of 6.55% per annum for deposits up to Rs 2 crore
  • HDFC Bank Senior citizen Care FD offers an additional premium of 0.25% to Senior Citizens

The purpose of the special deposit scheme is to safeguard the interests of senior citizens amid falling interest rate scenarios especially when the economy is in a bad shape due to the coronavirus pandemic. The interest income plays a vital role for senior citizens. This move will help them hold their finances better at the time of uncertainties.

SBI has also slashed FD interest rates by 20 bps with effect from 12 May. The bank also announced a 15 basis points reduction in its MCLR across all tenor effective from the 10th of May.

While there are different reports on the comparison of special Fixed Deposit scheme for senior citizens by the respective banks, there are few similarities in the schemes of three banks. Some of the common features of the scheme by SBI, HDFC, and ICICI Bank are:

1) Senior citizen’s special FD scheme is appropriate for the tenure of 5 years or more.

2) The new interest rates apply to fresh term deposits and on existing deposits as well.

3) The special FD scheme for senior citizens is relevant until 30th September 2020.

4) SBI, HDFC Bank and ICICI Bank are offering extra interest rates over the prevailing older interest rates for fixed deposit.

5) The deposit amount isn’t limited to Rs. 1.5 lakh

6) Residents of 60 years or more are eligible to take a position in Senior citizens special FD scheme.