SBI WeCare Fixed Deposit Scheme for Senior Citizens – Are there any better alternatives?
SBI WeCare Fixed Deposit Scheme for Senior Citizens Review
A couple of days back, SBI has launched a new fixed deposit scheme with the name “SBI Wecare Fixed Deposit” for senior citizens. SBI indicated that they have launched this new FD scheme to safeguard falling interest rates for Sr. Citizens. While there are several other saving schemes for Senior Citizens, they all have few limitations. In this article we would provide SBI WeCare Fixed Deposit Scheme Details, interest rates and any hidden factors in it. We would also indicate whether Senior Citizens have any other best alternative compared to this special FD scheme.
SBI WeCare Fixed Deposit Scheme – Issue Details
SBI has launched this FD scheme for senior citizens indicating that senior citizens are always worried about falling interest rates and this scheme would help them to get better interest rates.
SBI Wecare FD Scheme is open now.
SBI Wecare FD scheme would close by 30th September, 2020.
This FD Scheme is for Senior Citizens above 60 years of age.
Senior Citizens would get 30 basis points (0.3%) premium interest rates over and above regular interest rates for senior citizens.
Currently Senior Citizens are getting 0.5% higher interest rates compared to others. In this scheme they would get 0.8% higher compared to regular investors. (0.5% senior citizen category and 0.3% premium offered in wecare FD).
SBI WeCare FD Scheme interest rate is 6.5% now (5.7% for regular investors + 0.5% extra for Sr. Citizens + 0.3% premium rates for Wecare FD).
Senior Citizens need to do this FD for above 5 years to get this premium interest rate.
Premature withdrawals allowed, but terms and conditions would apply.
Reasons to invest in SBI FD Wecare FD Scheme
Here are some key reasons to invest this FD scheme
1) The SBI Wecare FD Scheme offers 0.8% higher rates compared to regular investors. Other banks are offering only up to 0.5% higher rates compared to others.
2) Though you might have top rated FD schemes in 2020, many of us feel risky. SBI is a public sector bank and FDs in this bank are safe to invest. Senior Citizens should invest in a safe FD scheme as they depend mostly on fixed income received through such FD scheme for their regular expenses. The safety of their deposit is high priority for them.
3) Bank FDs can be prematurely withdrawn and one can get them on the same day. This applies to all FD schemes and not just to SBI.
4) There is no maximum limit on this special FD scheme from SBI. One can invest any amount and enjoy higher interest rates.
Negative Factors in this FD Scheme
Here are some negative factors in this FD Scheme.
1) This FD scheme offers the lowest interest rates compared to other saving schemes like Senior Citizen Saving Scheme (SCSS).
2) You need to invest in this FD scheme 5+ year.
3) If you want to do premature withdrawal, you need to forego premium interest rates what you are getting in WeCare FD scheme SBI.
4) Generally 5 years FD schemes would get income tax benefits u/s 80c. However, tax benefits not available in this special FD scheme from SBI.
Is Premature withdrawals allowed in this special FD scheme from SBI?
Yes, one can do premature withdrawal, i.e. before 5 years. However, one need to forego premium interest rates on such FD scheme and would get lower interest rates the way it applies for other FD holders.
Is SBI Wecare FD Scheme best for Senior Citizens?
While SBI Wecare FD interest rates are higher by 0.3% compared to the other FD scheme offered for Senior citizens, there are better alternatives.
1) SCSS: Senior Citizen Saving Scheme (SCSS) from the post office and banks now offer 7.4% per annum interest rates. Interest is computed quarterly and paid every quarter. SBI Wecare FD Scheme interest rates are 6.5%, which is lower than SCSS. Hence SCSS Scores first. One can invest a maximum of Rs 15 Lakhs only in SCSS. One should first invest in SCSS and then look for other options.
2) GOI Taxable Bonds: Another alternative is GOI Bonds that come with 7 year maturity period and offer 7.75% interest rates. One can invest as low as Rs 1,000 and it is zero risk as these are issued by GOI. One can get half yearly interest or interest on maturity by investing in this FD scheme. If Senior Citizens feel they have sufficient money for emergency need and have surplus money to get some fixed income they can opt for this FD scheme too.
3) Postal MIS Scheme: PO MIS Scheme offers 6.6% and it has 5 year maturity period. Senior Citizens can invest upto Rs 9 Lakhs (in joint account) or Rs 4.5 Lakhs individually and get higher interest rates compared to SBI special FD scheme.
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SBI WeCare Fixed Deposit Scheme for Senior Citizens