SBI launches new high-yield FD for citizens 80 and above
What's the story
The State Bank of India (SBI) has introduced a unique fixed deposit (FD), called the SBI Patrons Fixed Deposit Scheme.
The initiative has been specifically designed to meet the financial needs of super senior citizens aged 80 and above.
The new scheme offers an additional interest rate of 10 basis points (0.10%) over the prevailing rates for senior citizens.
Scheme details
SBI Patrons FD scheme: Interest rates and deposit limits
The SBI Patrons FD scheme provides interest rates between 4.10% and 7.60% for super senior citizens.
The scheme mandates a minimum deposit of ₹1,000 and a maximum deposit limit of ₹3 crore.
The account can be operated solo or jointly, provided that in case of a joint account, the primary account holder is at least 80 years old.
The deposit tenure ranges between seven days and 10 years.
Scheme comparison
Comparison with other FD schemes and banks
SBI also offers other FD schemes with slightly higher interest rates for senior citizens.
For instance, SBI's special short-term FD schemes like the 444-day Amrit Vrishti (7.75% interest rate) and the 400-day Amrit Kalash (7.60%), provide higher returns than SBI Patrons Scheme.
Bank of Baroda also offers higher interest rates of 7.35% and 7.75% for one-year and three-year tenure, respectively, than SBI's rates of 7.1% and 7.6% under this scheme.
Scheme drawbacks
Premature withdrawal penalties and expert advice
The premature withdrawal penalty of SBI Patrons FD scheme is similar to that of regular deposits.
For deposits up to ₹5 lakh, the interest rate will be reduced by 0.50%, while for deposits over ₹5 lakh, it will be reduced by 1% from the rate applicable at the time of making the deposit.
Deposits withdrawn within seven days of being made won't earn any interest.