Investment
oi-Vipul Das
ICICI Bank, which was due to end its “Golden Years FD” plan for elderly residents on April 8, has now extended the deadline until October 7, 2022. This is particularly favorable for seniors, as it comes just one day after the RBI decided to leave key rates unchanged.
On May 20, 2020, ICICI Bank announced the introduction of a special fixed deposit scheme called “Golden Years FD” for senior citizens who have been negatively affected by interest rate cuts. The bank guarantees resident seniors an additional interest rate of 0.25% on top of the existing additional rate of 0.50% per annum on new and rollover deposits throughout the May 20 regime period 2020 to October 7, 2022.
Only fixed deposits of less than Rs 2 Cr with a tenor of 5 years 1 day to 10 years are eligible for the additional interest rate benefit. The bank grants a regular interest rate of 5.60% on deposits maturing within the aforementioned duration, but seniors will receive a rate of 6.35%, an increase of 0.75% under the Golden Years FD.
Must read: 2 Government Guaranteed Fixed Deposits You Should Look For With an 8% Yield
Premature withdrawals from Golden Years FD made from 5 years 1 day would be taxed with a 1.25% penalty, while premature withdrawals made before 5 years 1 day will be subject to ICICI’s current premature withdrawal regulations. Bank.
Two other major banks, State Bank of India (SBI) and HDFC Bank, introduced special fixed deposit schemes for the elderly in 2020 when the interest rate cycle was significantly affected due to the economic downturn triggered by COVID-19. SBI has a special FD program for the elderly called “SBI Wecare”, which has a duration of 5 to 10 years. The bank grants a regular rate of 5.50% over this duration, while the elderly will receive a rate of 6.30%, an increase of 0.80%. “A special deposit “SBI Wecare” for the elderly introduced in the TD retail segment in which an additional bonus of 30 bps (on top of the existing 50 bps, as shown in the table above) will be paid to the elderly on their retail TD for “5+ years” only. The “SBI Wecare” deposit scheme is extended until September 30, 2022,” SBI said on its website.
HDFC Bank has a special fixed deposit program for seniors called Senior Citizen Care FD, which is available until September 30, 2022. The program has a term of 5 years 1 day – 10 years, and the bank offers seniors an interest rate of 6.35%, which is 0.75% above the standard rate. “An additional premium of 0.25% (on top of the existing premium of 0.50%) will be given to senior citizens who wish to reserve the fixed deposit below 5 crore for a duration of 5 (five) years of a day to 10 years, during the special deposit offer from May 18, 2020 to September 30, 2022,” HDFC Bank said on its website.
Article first published: Saturday, April 9, 2022, 9:12 a.m. [IST]
