CHENNAI: Following the State Bank of India’s decision, HDFC Bank has also extended its special fixed deposit schemes for senior citizens by three months up to June 30. A senior citizen who makes a fixed deposit under the HDFC Bank Senior Citizen Care FD will get an interest rate of 6.25 per cent. These rates have been applicable from November 13, 2020.
Such schemes had been launched by several banks last year during the height of the pandemic to provide some remunerative option to senior citizens at a time when interest rates were diving. With interest rates not expected to increase anytime soon even though inflation is starting to strengthen again, financial experts note that FDs are among the safest bets for the elderly.
“It is always wise to invest some portion of your money in low risk investment options like an FD. And if the elderly person is getting more interest from such a scheme, then one should opt for it,” said S Ganesan,a Chennai based financial expert. Last week, SBI had extended its special FD scheme until June 30. At present, SBI gives a 5.4 per cent interest rate on a five-year FD for the general public. For a senior citizen creating a fixed deposit under the special FD scheme, the interest rate is 6.20 per cent.
HDFC Bank, meanwhile, said that an additional premium of 0.25 per cent (over and above the existing premium of 0.50 per cent) shall be given to Senior Citizens who wish to book FDs of less than `5 crore for a tenure of 5 years during the special deposit offer that will be open until June 30.
In the case of premature closure of an FD booked under the HDFC Bank Senior Citizen Care FD scheme (including a sweep in/partial closure) post 5 years, the interest rate will be 1.25 per cent below the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower. In case of premature closure prior to 5 years, the interest rate will be 1.00 per cent below the contracted rate or the base rate applicable for the period of the deposit.
Special FD rates for seniors
- HDFC Bank says extra premium of 0.25% shall be given to Senior Citizens who book FDs of less than Rs 5 crore for 5 years
- In the case of premature closure after 5 years, the interest rate will be 1.25% below contracted rate
- For premature closures before 5 yearr, this will be 1%