In this tough and falling interest rates times, Senior Citizens are most affected with a huge dent in the interest rates they earn from deposits. SBI has taken an initiative to support Senior Citizens by starting an extra interest paying fixed deposit WE CARE Fixed Deposit Scheme exclusively for senior citizens from 12th May 2020.
Who can invest ?
Any citizen of India above 60 years can invest in SBI We Care Deposit. This is meant only for resident senior citizens and NRIs can not deposit in it.
SBI We Care Deposit scheme is available to invest starting from 12th May 2020 to 30th September 2020.
What is the benefit ?
The senior citizens can get a 0.80% extra interest rate above the general public. SBI is already paying an extra 0.50% interest to deposits made by senior citizens and through this scheme, 0.30% of additional interest will be provided making the total additional interest to 0.80%.
Tenure of the We Care Deposit
The fixed deposit can be made for a minimum 5 year to 10 year term.
Interest payment frequency
The interest is paid on monthly or quarterly basis. TDS will be deducted as per the depositor’s tax slab.
Mode of investment
If you are a new customer, you can walk into the nearest branch and open. Existing customers can open through online or through SBI’s YONO app.
Loan and premature withdrawal
Loan against the deposit can be availed. Premature withdrawal can be made. But, the additional interest rate of 0.30% will not be paid. Which means you will only end up getting 0.50% additional interest.
Should you invest ?
The extra interest rate is good but when compared to other investment options available like the post of senior citizen savings scheme, Pradhan Mantri Vaya Vandana Yojana and simple post office monthly income and time deposit schemes the interest offered is still less.
| Scheme | Interest rate |
|---|---|
| SBI We care FD Scheme | 6.2% |
| Senior Citizen Savings Scheme | 7.4% |
| Pradhan Mantri Vaya Vandana Yojana | 7.4% |
| Post Office Monthly Income Scheme | 6.6% |
| Post Office 5 Year Time Deposit | 6.7% |
When compared with respect to returns, other schemes are generating better returns. PMVVY has the highest maximum limit of investment Rs. 15 Lakhs and the next best option seems Senior Citizen Savings scheme which gives returns on par with PMVVY with a maximum investment limit of Rs. 15 Lakh. If you are still left with the excess amount after investing in these two schemes, you may prefer the Post Office Monthly Income Scheme.
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