A special fixed deposit (FD) is a kind of investment option provided by some banks and financial institutions. It generally provides a higher rate of interest than a regular fixed deposit but is subject to additional terms and conditions, such as tenure, deposit amount, penalty for early withdrawal and validity period. Some banks had introduced special fixed deposit plans designed primarily for senior citizens during the first wave of the Covid-19 outbreak, offering extra interest rate benefits over and above the already-in-place benefit of 50 bps higher interest rates for them.
Speaking about special FD programmes for elderly individuals, IDBI Bank launched its “IDBI Naman Senior Citizen Deposit” scheme for resident elderly individuals on April 20, 2022. Surprisingly, according to the bank’s official website, this deal will expire on March 31, 2023.
Regarding the special benefit of “IDBI Naman Senior Citizen Deposit” scheme, IDBI Bank has mentioned on its website that “Resident Senior citizen customers will get an enhanced interest rate of 0.25% over and above existing additional rate of 0.50% per annum (total mark-up 0.75% over Card Rate).”
According to the bank, the above special benefit for senior citizens under the “IDBI Naman Senior Citizen Deposit” scheme is only valid on tenors of more than 1 year up to 10 years.
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All other term deposit benefits, terms, and conditions will stay the same and apply to the aforementioned plan as well. The additional rate will be available for both newly made accounts as well as deposits renewed throughout the scheme’s active time period.
Under the “IDBI Naman Senior Citizen Deposit” scheme, senior citizens will get an interest rate of 7.50% on a tenor of more than 1 year to 2 years (except 444 Days & 700 Days), 7.25% on more than 2 years to 3 years tenor, and 7.00% on 3 years to 10 years tenors. These interest rates are 75 bps higher than the standard rates applicable for senior citizens till 31st March, 2023.
Meanwhile, the country’s largest lenders SBI and HDFC Bank are also going to end their special fixed deposit schemes for senior citizens on March 31, 2023. On15- Feb- 2023, SBI introduced 400 days” (Amrit Kalash) FD scheme with 7.10% interest for the general public and 7.60% for senior citizens. On the other hand, in May 2020, HDFC Bank introduced “Senior Citizen Care FD” and after several extensions, the scheme is finally going to endon March 31, 2023 until further extensions. The scheme comes with fixed deposits ofless than 5 crores for a tenure of 5 (five) years One Day to 10 Years and under the scheme, HDFC Bank is promising an additional premium of 0.25% over and above the existing premium of 0.50%.