With the senior citizen special FD scheme offered by SBI, HDFC, ICICI, and Bank of Baroda extending till September 2021, here are other alternatives as well that the senior citizenry can explore for financially securing the twilight years of their life.
The pandemic has undoubtedly been disproportionately cruel to the elder citizens, leaving them vulnerable, both health-wise and money-wise. To safeguard the older population against the ravages of COVID-19, the banks have been offering additional returns on top of the special rates applicable for senior citizens.
The scheme, which has been subject to various extensions since its inception in May 2020 and ending in September this year, is applicable on FDs with a tenure of 5 years or more.
As per the 2011 census, there are nearly 100 million elderly persons in the country aged 60 and above, and if United Nations Population Fund and HelpAge India estimates are to be believed, this figure is expected to reach 173 million by 2026.
SBI’s “Wecare '' term deposit scheme for senior citizens, which offered an additional 30 bps interest rate on top of the 50 bps already being allotted to FDs of senior citizens exceeding 5 years or more, stands extended till September 30, 2021.
For the general public, which avails an interest rate of 5.4 percent on their FDs, senior citizens will avail additional benefits with a rate of 6.2 percent effective January 8, 2021.
The HDFC Bank senior citizen care FD offers 75 bps extra returns over the prevailing rates. Based on the current FD rates of the bank, which went into effect in May 2021, a senior citizen is eligible for around 6.25 percent under this scheme.
"An additional premium of 0.25% (over and above the existing premium of 0.50%) shall be given to Senior Citizens who wish to book the Fixed Deposit less than 5 crores for a tenure of 5 (five) years One Day to 10 Years, during special deposit offer commencing from 18th May'20 to 30th Sep’21,” the bank website mentioned.
Under the ICICI bank Golden Years FD scheme, the beneficiary will get an extra 0.8 percent above the normal FD rates. With the current FD interest rate for a 5-10 year FD tenor being 5.5 percent, senior citizens will earn 6.3 percent under this scheme.
BoB (Bank of Baroda) is offering an additional percent for senior citizens over its normal FD rates, taking the cumulative rate applicable to around 6.25 percent. "1.00% for "above 5 years to up to 10 years" tenor and valid till 30.09.2021," the bank’s website mentioned.
However, there are other viable investment avenues that can be explored as well. With NPS, Senior Citizen Savings Scheme, Pradhan Mantri Vaya Vandana Yojana (PMVVY), which offer interest in the range of 6-8 percent, senior citizens can be assured of a regular source of income along with the safety of their money
Anirudh (name changed), a Delhi-based personal finance advisor, advocates for better investment options like mutual funds instead of vanilla FDs for senior citizens. “It is important to examine senior citizens' investment avenues in the present. Previously, once a person crossed 60 years of age, they were advised to not put money in risky instruments like mutual funds and equity. But thanks to improved medical facilities, life expectancy has increased another 20-25 years. Thus, it is important to participate in market action. Debt funds and Index funds are safe options for investing for senior citizens who prefer less risk and more fund stability.”
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