On Thursday, the State Bank of India (SBI) introduced a new scheme for senior citizens called "SBI Wecare Deposit" for senior citizens in its retail term deposit segment. The scheme aims at safeguarding the interest of senior citizens in fixed deposits amid falling rate of return.
Under this scheme, those aged over 60 years will get an additional 30 basis points (0.30 percent) premium on term deposits (also known as fixed deposits) with tenure of 5 years and above.
The lender said that the scheme will be effective till 30 September 2020.
For retail term deposits (FDs) of 'below 5 years' senior citizens will continue to earn 50 bps (0.50 percent) higher than the rate applicable to the general public.
As for FDs of 5 years or more, they will be able to earn 0.80 percent more than the interest rate offered to the general public.
This additional premium will not be payable in case of premature withdrawal of such deposits.
SBI also announced a cut on interest rates on retail term deposits by 20 bps for tenors up to 3 years. The cut will come into effect from 12 May.