SBI Scheme : As individuals grow older, their willingness to take financial risks tends to decline. After retirement, most ordinary investors prefer not to take any risks with their hard-earned money.
While it is true that senior citizens are more cautious about their investments, it doesn’t mean that there are no opportunities to grow their savings. Banks offer several schemes specifically designed for senior citizens that provide guaranteed income. One such scheme is the Senior Citizen Term Deposit Scheme offered by the State Bank of India (SBI).
If you have recently retired and have a significant amount of savings, you can consider investing in SBI’s Senior Citizen Fixed Deposit (FD) scheme for a longer period of time.
SBI FD Rates 2023: Benefits for Senior Citizens
According to the information available on the SBI website, senior citizens have the option to deposit their money in SBI’s Fixed Deposit (FD) scheme for a maturity period ranging from 7 days to 10 years. Generally, senior citizens receive an additional interest rate of 0.50% on their fixed deposits compared to regular customers. Moreover, senior citizens receive an extra 1% interest on FDs with a tenure of 5 years to 10 years.
Here are the interest rates:
As per the SBI website, regular customers are receiving an annual interest rate of 6.5% on FDs ranging from 5 years to 10 years, whereas senior citizens are offered an interest rate of 7.5% per annum. Under the SBI V-Care Deposit Scheme, senior citizens receive an additional half percent premium interest on FDs with a tenure of 5 to 10 years.
SBI FD: Rs 10 lakh will grow to Rs 21 lakh in 10 years
Let’s consider a scenario where a senior citizen invests 10 lakhs in an SBI FD scheme with a maturity period of 10 years. According to the SBI FD calculator, upon maturity, the investor will receive a total of Rs 21,02,349 at an interest rate of 7.5% per annum. The interest earned will amount to a fixed income of Rs 11,02,349.
SBI has increased the interest rates by 0.25% on deposits below Rs 2 crore from February 15, 2023. As banks are raising interest rates, it not only impacts loan costs but also affects the interest rates offered on deposits. Previously, SBI had increased the interest rates on FDs on December 13, 2022.