- The largest commercial bank of India, State Bank of India (SBI) has just announced a new unique fixed deposit scheme for the benefit of senior citizens, SBI ‘WECARE’ Senior Citizens’ Term Deposit scheme.
- The special SBI ‘WECARE’ Senior Citizens’ FD scheme was made available for investment from 12th May 2020.
- The scheme aims to provide a higher rate of interest to senior citizens in the scenario for the falling rate of interest
Written below are the salient features of the SBI FD scheme for senior citizens: Also, the SBI FD interest rates are quite nominal.
What is the Eligibility Criteria?
Senior citizens must be resident of India aged 60 years and above to invest in this SBI special FD scheme.
What is the type of deposit?
SBI’s ‘WECARE’ fixed deposit scheme is introduced in the retail term deposit segment with an aim to protect the income of senior citizens in the current scenario of falling rate regime.
What is the term of deposit?
The minimum term for SBI ‘WECARE’ fixed deposit is 5 years and the maximum term is ten years.
What is the Interest Rate?
- SBI’ WECARE’ fixed deposit scheme for Senior Citizens’ will be fetching 80 basis points (bps) rate of interest above the interest rate offered to the regular fixed deposits.
- The lender has cut the interest rates offered on the fixed deposits that will become effective from 12th May.
- The new revised rates offered by the SBI is 5.7% on an FD of the 5-year term for the regular fixed deposit by the general public.
- The interest rate applicable under this special FD scheme for senior citizens is 6.5%
- An additional 30 basis points (bps) will be paid to senior citizens retail term deposits that are for 5 years or above only under this new financial product.
How will the interest be paid?
- As per the SBI notification, the interest earned under the SBI special FD scheme will be paid on the maturity of the Fixed Deposit. Under general term deposit by senior citizens, the interest is paid at monthly/ quarterly intervals. The interest, net of TDS will get credited directly in the customer’s account.
- If the interest earned goes beyond ₹50,000 in a financial year, the TDS will be deducted.
Is the Loan facility available under this new scheme?
- The special fixed deposit also offers the facility of taking a loan against the investment.
- Senior citizens who have opened SBI WECARE fixed deposit can take a loan for liquidity purpose in case of emergencies.
- It will also protect your equity investments by giving liquidity provision.
Where is the scheme available?
- Senior citizens can visit a nearby SBI branch to open this special term deposit.
- Existing customers of SBI can open the Fixed Deposit with the help of net banking or SBI’s Yono app.
Till when this scheme is available?
SBI ‘WECARE’ scheme was opened on 12th May 2020 is valid up to 30th September 2020.
What will happen if you withdraw prematurely?
- The additional interest (30 bps) offered under this special scheme for senior citizens will not be paid if you withdraw prematurely.
- So, if you make a premature withdrawal of the FD, the interest paid will only be 6.20% (50bps) above the general customers
- The special FD scheme, SBI’ WECARE’ is available if you make a fresh deposit (a new FD) and renewal of the deposits that are maturing.
- The scheme also protects the senior citizens’ income by offering additional interest on their FD investments.
Conclusion: SBI ‘WECARE’ is an exceptional financial product and secure investment for senior citizens. You get significantly high interest than general deposits. Even in a case of premature withdrawal, 6.2% (50bps) above the general customers will be paid to them.