Special Fixed Deposit Schemes for Senior Citizens - HDFC, SBI, and ICICI Bank’s Current Rates

State Bank of India (SBI) and few private banks (ICICI and HDFC) have launched special fixed deposit schemes for the senior citizens of the country. These fixed deposit schemes are provided for safeguarding the interest of senior citizens as the rate of interest of FD is falling at a rapid rate. These banks are offering an extra rate of interest on the existing rates that are applicable for the senior citizen fixed deposits.

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Special FD Scheme for Senior Citizens from State Bank of India

  • The special FD scheme by SBI for senior citizens is also known as ‘SBI We Care’.
  • The tenure of this scheme is five years.
  • This scheme is available for the customers from 12th May 2020.
  • The new rate of interest is 80bps higher.
  • Rate of Interest: If a senior citizen keeps an FD under the special scheme of FD, then the rate of interest that applies to this FD scheme will be 6.20%. These SBI FD rates are applicable from 27th May 2020.
  • Premature Withdrawal: Upon premature withdrawal, the extra 30bps are not paid.
  • A penalty of 0.5% can be applied.
  • The maximum amount that a senior citizen can deposit in this scheme is less than Rs. 2 Crore.

Special FD Scheme for Senior Citizens from HDFC Bank

  • The special FD scheme by HDFC Bank for senior citizens is known as HDFC Senior Citizen Care.
  • The tenure for this scheme ranges from five years one day to 10 years.
  • The HDFC Bank made this scheme available from 18th May 2020.
  • The new rate of interest for this scheme is 75 bps higher.
  • Rate of Interest: If a senior citizen opts for this scheme, then the rate of interest applicable to the fixed deposits will be 6.25%. Under this HDFC Senior Citizen Care scheme, an additional 25 bps are paid to the senior citizens. These new rates are applicable from 12th June 2020.
  • Premature Withdrawal: Upon premature withdrawal, a penalty of 1% is applied, if a senior citizen withdraws from the scheme before completion of five years.
  • Maximum Deposit Amount: The maximum amount that a senior citizen deposit under this scheme is less than Rs.2 Crore.

Special FD Scheme for Senior Citizens from ICICI Bank

  • The special FD scheme by ICICI Bank for senior citizens is also known as ICICI Bank Golden Years.
  • This scheme has been made available by the ICICI Bank from 20th May 2020.
  • The tenure of this scheme ranges from five years one day to 10 years.
  • Rate of Interest: The new rate of interest for this scheme is 80bps higher.
  • So, the rate of interest offered by the ICICI Bank for this FD scheme for senior citizens is 6.30% / annum.
  • Premature Withdrawal: If one withdraws before completion of five years, then a penalty of 1% is applied.
  • If a senior citizen withdraws after five years one day, then the penalty of 1.30% is applied.
  • The maximum deposit amount in this scheme can be less than Rs. 2 Crore.

How TDS Is Charged on Fixed Deposit Schemes for Senior Citizens?

TDS or Tax Deduction at Source is a method of deducting the tax at the income source. When we talk about NBFCs, fixed deposits, and Banks the tax from the interest accrued before crediting it to the account of the depositor. However, in the case of cumulative payment of interest, TDS is charged as per the interest accrued, which is yearly, half-yearly, quarterly, or monthly.

The rate at which the tax is deducted for the interest earned by senior citizen fixed deposits is 10% when the interest earned exceeds Rs. 50, 000 opposed to regular citizen's interest earned, which is Rs. 40,000.

Documents Needed for Opening a Senior Citizen Fixed Deposit Account

A senior citizen should check the following documents for opening a fixed deposit account in any non-banking financial institution or bank:

  • Photo ID proof (Voter ID Card, passport, etc.)
  • Proof of resident (Passport, Aadhaar card, latest water bill /electricity bill, etc.)
  • Proof of age
  • Form 15H
  • PAN Card or Form 60, in case of unavailability of PAN card

Eligibility Criteria:

The majority of the Indian banks consider senior citizens to those people who are of or more than 60 years.

In addition to this, there are some banks and financial institutions who consider super senior citizens also. Super senior citizens are those who are more than 80 years. These are the people who are given extra interest rates on fixed deposits over the interest rates that are offered to the senior citizens.

Advantages of Fixed Deposits for Senior Citizens

The senior citizens get the following advantages with a fixed deposit account:

  • Higher Rate of Interest: The rate of interest for fixed deposits offered for senior citizens is higher than the rate of interest that is offered for normal people.
  • Secure and Safe Investment: If you invest in a bank’s fixed deposit, then you are investing in one of the secure and safest mediums. This is because most of the banks are regulated by the Reserve Bank of India.
  • Guaranteed Returns: The returns of a fixed deposit account are always the same despite the current scenario of market or inflation.
  • Periodic Pay-Out Option of Interest: A senior citizen can select the frequency of the interest pay-out on a yearly, quarterly, or monthly basis.
  • Automatic Renewals: Most of the banks nowadays provide the feature of automatic renewals when the FD matures. This clearly says that if the depositor (in this case senior citizen) has not made any instruction while opening an account, then the FD is renewed automatically on the date of maturity. The period for which the auto-renewal facility is offered for FD is the same for which it was placed initially.

Final Words!

If you want to know which bank is the best for fixed deposits, then the aforementioned description must have given you the answer. Under the FD schemes of these banks, the senior citizens get special interest rates.

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