State Bank of India (SBI) has extended special fixed deposit scheme for senior citizens for the second time. The special scheme for the senior citizens will be available till 31st March 2021.
The scheme was introduced to provide a higher interest rate to the senior citizens in the current pandemic time. The country’s top lender had announced SBI ‘WECARE’ Senior Citizens’ Term Deposit scheme in May for the senior citizens. At that time they announced that till September. Later they announced that the scheme will be valid till 31st December. The scheme had been extended once again till March.
The scheme for senior citizens will fetch 80 basis points (bps) interest rate than the rate offered to the general public. Currently, SBI gives 5.4% interest rate on five years fixed deposit for the general public. The interest rate applicable to the FD will be 6.20% if a senior citizen puts a fixed deposit under the special FD scheme. The additional interest i.e. 30 bps will not be payable in case of premature withdrawal of such deposits under the special scheme for senior citizens
The fixed deposit investment will fetch only 5.9% if gone for premature withdrawal of an FD under the scheme. This is 50 bps above the general customers. The FDs of SBI between 7 days to 10 years will provide 2.9% to 5.4% to the general public. The senior citizens will get 50 basis points additional on these deposits. The last revision of FD rates by SBI was on 10 September. The Senior Citizens will get an additional premium of 30 bps on their retail TD for five years and above the tenor. The SBI Wecare was launched in the retail term deposit segment.
The introduction of this scheme was because after the cutting of repo rate and reverse repo rate by the Reserve Bank of India (RBI) several banks cut interest rates on fixed deposits and savings bank accounts. Under this special scheme, a fixed deposit investment can be made for a minimum of five years and a maximum of 10 years.
