Jan 31, 2021 A special 'SBI Wecare' Deposit for Senior Citizens introduced in the Retail TD segment wherein an additional premium of 30 bps (over & above the existing 50 bps) will be paid to Senior Citizens on their retail TD for '5 Years and above' tenor only. 'SBI Wecare' deposit scheme stands extended till 31st March 2021,' SBI mentioned on its website.

SBI takes pride in its association with Senior Citizens and introduces new Deposit Scheme “SBI WECARE’ protecting their income by offering additional interest on Term Deposits. The salient features of scheme are: S.N. DESCRIPTION FEATURES 1 Purpose Protecting income of Senior Citizens by providing additional interest on their Term Deposits. The State Bank of India, which is the country’s largest bank, has launched a special fixed deposit scheme called the SBI WeCare Senior Citizens’ Term Deposit scheme, keeping in mind the needs. Jan 15, 2021 The SBI 'WECARE' Senior Citizens' Term Deposit scheme has been launched to provide the higher interest rate to senior citizens in the current falling interest rate scenario as this category of investors are usually dependent on interest income. State Bank of India (SBI) has launched a special fixed deposit (FD) scheme for senior citizens named as “SBI Wecare Deposit”. The scheme has been launched keeping in view the welfare of the Senior Citizens of the country in view of the situation arising out of pandemic crisis and the future uncertainties.

The country’s largest banker, State Bank of India (SBI), recently announced a special fixed deposit scheme for senior citizens called, SBI ‘WECARE’ Senior Citizens’ Term Deposit scheme. The scheme is available for investment from today i.e. May 12, 2020.

SBI offers senior citizens’ an additional 50 bps interest rate across all tenors. After the latest revision, senior citizens will get 3.8% to 6,5% on FDs maturing in 7 days to 10 years.

SBI had slashed the interest rate on FDs by 20-50 bps across tenors effective March 28 in the second rate cut in March. The bank had cut interest rates on FDs on March 10.

According to the bank, the scheme has been launched to provide a higher interest rate to senior citizens in the current falling interest rate scenario as this category of investors are usually dependent on interest income. The launch of this scheme comes in the wake of several banks cutting interest rates on fixed deposits and savings bank accounts due to the Reserve Bank of India (RBI) cutting repo rate and reverse repo rate.

Here are the main features of the newly-launched scheme.

The SBI website says, ‘ Additional premium of 30 bps (over and above existing premium of 50 bps) over card rate for public‘. This would mean that any revision in the fixed deposit interest rates applicable to the general public in the future is likely to impact the interest rate applicable on the ‘WECARE’ fixed deposit scheme. (100 bps = 1%)

What is the tenure of FDs placed under the scheme?
A fixed deposit investment under this special scheme can be made for a minimum of five years and a maximum of 10 years.

How is interest payable as per the scheme?
Interest on fixed deposits under this scheme will be payable at monthly or quarterly intervals. The scheme details available on SBI’s website do not clarify whether the senior citizen has the option of receiving the interest payment at half-yearly or yearly intervals.

SBI is also yet to clarify whether a fixed deposit investor can opt for the cumulative option for the interest on the fixed deposit. Normally, under the cumulative option, interest on a fixed deposit is payable along with the principal amount at the time of maturity.

Remember the interest, credited to the investor’s bank account, will be net of taxes deducted by the bank. For senior citizens, TDS will be deducted if the total interest in a financial year exceeds Rs 50,000. The total of interest earned on all fixed deposits, recurring deposits or any other deposits held with the bank would be taken into account for the purpose of TDS. Interest credited in a savings bank account is not subject to TDS.

Last date of investing in the scheme

How to invest in the scheme?

Loan against fixed deposits

Premature withdrawal of the FDs under the scheme

Should you invest in the scheme?

For instance, senior citizens savings scheme (SCSS) is currently offering 7.4 per cent per annum. The interest rate differential between SBI FD and SCSS is 0.90 percent. SCSS also allows premature withdrawal albeit by paying some penalty. The tenure of the SCSS scheme is also five years.

As per the SCSS rules, if the scheme account is closed before 1 year, no interest will be payable and will be recovered if already paid. If the account is closed after one year, then an amount equal to 1.5% of the deposit is to be deducted. Similarly, if the scheme account is closed after 2 years, then 1% of the deposit will be deducted. The maximum amount that can be deposited in the scheme is Rs 15 lakh.

Interest rates on different schemes available to senior citizen

Other post office schemes such as five-year post office time deposit is currently offering 6.7 per cent and Post office monthly income scheme account is offering 6.6 per cent per annum which is slightly higher than the interest rate on SBI special FD for senior citizens.

Sbi Wecare Deposit Online

Another option is RBI’s 7.75 per cent taxable bonds. The interest rate differential right now is 1.25 per cent. Though the bonds have a tenure of seven years, however, senior citizens do have the option of premature withdrawal.

For a senior citizen aged between 60 to 70 years, the lock-in period is six years from the date of issue. For those aged between 70 to 80 years, the lock-in is for five years and for any senior citizen above 80 years of age, a four year lock-in will be applicable. The cost of premature withdrawal is 50% of interest due and payable for the last six months of the holding period will be recovered in such cases, both in respect of cumulative and non-cumulative bonds.

Recurring Deposit Sbi

Therefore, a senior citizen should evaluate all the features of the scheme and not just interest rate before making any investment.