- Sbi We Care Deposit Scheme
- Sbi Wecare Deposit Scheme In Hindi
- Sbi Deposit Rates History
- Sbi Deposit Scheme
- Sbi Wecare Deposit Scheme
- Sbi Deposit Rate
A few days back SBI launched the new senior citizen deposit scheme branding it as an SBI WeCare Deposit. Between SBI Wecare Deposit Vs Senior Citizens Savings Scheme (SCSS), which is the best one you can choose?
Jan 31, 2021 A special 'SBI Wecare' Deposit for Senior Citizens introduced in the Retail TD segment wherein an additional premium of 30 bps (over & above the existing 50 bps) will be paid to Senior Citizens on their retail TD for '5 Years and above' tenor only. 'SBI Wecare' deposit scheme stands extended till 31st March 2021,' SBI mentioned on its website. SBI Wecare Deposit has been introduced in the retail term deposit segment to safeguard the interests of senior citizens in the current falling rate regime.
A special “ SBI Wecare” Deposit for Senior Citizens introduced in the Retail TD segment wherein an additional premium of 30 bps (over & above the existing 50 bps as detailed in the above table) will be paid to Senior Citizen’s on their retail TD for '5 Years and above' tenor only.
What are the features of the SBI WeCare Deposit Scheme for Senior Citizens?
# This scheme is meant for Senior Citizens whose age is 60 years and above.
# Available for Resident Indians ONLY. This scheme is not meant for NRIs.
# You can open this deposit only for 5 years to 10 years term.
# It’s a special scheme launched to help seniors during the COVID-triggered interest rate reduction. Hence, this is a limited period scheme. The scheme is open between May 12, 2020, and September 30, 2020.
Sbi We Care Deposit Scheme
# The current interest rate for SBI WeCare is 0.80% higher than the normal FD rates. Usually, the interest rate difference between normal citizens to senior citizens is 0.50%. However, for this SBI WeCare Deposits (5 years and 10 years deposits), they are higher of 80 BPS. Hence, the current interest rate on SBI WeCare Deposit is 6.5%.
I have highligted in yellow with respect to the applicable interest rate on SBI WeCare Deposit.
# Premature withdrawal is allowed. However, the additional 0.30% benefit for 5 years and 10 years deposit will not be payable. Hence, if you tried to withdraw before maturity, then you will get the interest rate of 6.2%
# Interest payment is either monthly/quarterly or at maturity.
# There is no tax benefit under this scheme.
# TDS will be deducted on the interest payment if the total interest (from all FDs, RD, etc. but not savings account) paid in a financial year exceeds Rs 50,000.
# You can avail a loan on this Deposit.
SBI WeCare Deposit Vs Senior Citizens Savings Scheme (SCSS) – Which is the best?
Now let us understand the difference between SBI WeCare Deposit Vs Senior Citizens Savings Scheme (SCSS).
# The biggest difference is an interest payout. The current interest rate on the Senior Citizens Savings Scheme (SCSS) is at 7.4%. However, the SBI WeCare Deposit offers you at 6.5%. It is almost a 0.9% difference.
# SBI WeCare Deposit is available for up to Rs.2 Cr. However, the Senior Citizens Savings Scheme (SCSS) maximum limit is Rs.15 lakh ONLY.
# No Income Tax Benefit if you invest in SBI WeCare Deposit. However, the money you deposit in the Senior Citizens Savings Scheme (SCSS) is eligible for deduction under Sec.80C.
# Interest payment in SBI WeCare Deposit is on monthly/quarterly or at maturity. However, in the case of the Senior Citizens Savings Scheme (SCSS), it is on a quarterly basis.
# If you try to break the SBI WeCare Deposit before maturity, then you will end up earning the interest rate of 6.2%. However, in case of Senior Citizens Savings Scheme (SCSS), the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount 1.5% of the deposit shall be deducted and the balance paid to the depositor. In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted and balance paid to the depositor.
# Loan facility is available in the case of SBI WeCare. But you can’t avail the loan in case of Senior Citizens Savings Scheme (SCSS).
# In the case of SBI WeCare Deposit, the term available is 5 years to 10 years. However, in the case of SCSS, it is 5 years only. Also, in the case of SCSS, you are allowed to extend for one more time only once.
Refer the complete details about Senior Citizens Savings Scheme (SCSS) at our post “Post Office Senior Citizen Scheme (SCSS)-Benefits and Interest Rate“.
Conclusion:-Considering all the above features, I don’t think it is worth to invest in SBI WeCare FD. Instead, I feel the Senior Citizen Savings Scheme (SCSS) is far better.
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Sbi Wecare Deposit Scheme In Hindi
SBI Wecare Deposit is a new term deposit scheme announced by the largest commercial bank in India for Senior Citizens. The SBI Wecare scheme is announced to protect the interest income earned by senior citizens on their term deposits, in the currently falling interest rate regime.
What prompted SBI to announce SBI Wecare Deposit scheme?
Sbi Deposit Rates History
On 7th May, 2020 SBI announced a cut of 15 bps in its Marginal Cost of Funds Based Lending Rate (MCLR). Similarly, it also reduced interest rate on retail term deposits (below Rs 2 crores) by 20 bps for tenures up to three years. The reduction in interest rate on deposits is announced considering the overall liquidity available in the market and deposit position of the bank.
Sbi Deposit Scheme
Majority of banks in India have been offering additional 50 bps interest to senior citizens over the deposit interest rate applicable for same tenure for public. SBI has been offering 50 bps interests as senior citizen benefits.
Though senior citizens have been receiving 50 bps (0.50%) interest more on their fixed deposits than that applicable to general public, the actual interest ratehas eroded substantially over the last few months due to consistent cuts in Repo rates by RBI and consequent cut in lending and deposit interest rates by banks. SBI through the new scheme offers some relief to senior citizens who are ready to lock in deposits for longer period. SBI safeguards the interest of senior citizens to some extent in the falling interest rate regime by offering additional 30 bps (0.30%) interest rate to senior citizens for deposits of 5 years and above. Total senior citizen benefit in interest rate offered for such deposits is 80 bps (0.80%).
How much is the additional interest rate offered for deposits under SBI Wecare Deposit scheme?
So far, SBI has been offering additional 50 bps (0.50%) interest as senior citizen benefit on term depositsof all tenures. The same benefit of 50 bps will continue for term deposits below 5 years. The senior citizen benefit will be 80 bps (0.80%) for term deposits of 5 years and above under SBI Wecare Scheme. This 0.8% is inclusive of the now announced additional interest of 0.3%.
SBI Wecare Deposit scheme will be in existence till September 30,2020 for opening deposits and the deposits with the benefits can be opened from 12th May 2015.
The fixed deposit interest rate applicable on fixed deposits for public and senior citizens effective from 12th May 2020 will be as shown below:
|Period||Existing rate for public wef 28/3/20||Revised rate for public wef 12/05/20||Existing rate for Senior citizen wef 28/3/20||Revised rate for senior citizen wef 12/05/20|
|7 days to 45 days||3.50||3.30||4.00||3.80|
|46 days to 179 days||4.50||4.30||5.00||4.80|
|180 days to 210 days||5.00||4.80||5.50||5.30|
|211 days to less than 1 year||5.00||4.80||5.50||5.30|
|1 year to less than 2 years||5.70||5.50||6.20||6.00|
|2 yeras to less than 3 years||5.70||5.50||6.20||6.00|
|3 years to less than 5 years||5.70||5.70||6.20||6.20|
|5 years and upto 10 years||5.70||5.70||6.20||6.50|
Is the interest rate for senior citizens on SBI Wecare Deposit scheme is the best in the market?
Sbi Wecare Deposit Scheme
The best interest rates offered by some of the other leading banks in India for public and senior citizens are provided below, for comparison.
|Bank||Period||Best interest rate offered for public – %||Best interest rate offered for senior citizens -%||Senior citizen benefit -%|
|HDFC Bank||2 years 1 day to 10 years||6.00||6.50||0.50|
|Indus Ind Bank||1 years to 1 year 2 days||7.00||7.50||0.50|
|Bank of Baroda||1 year to 10 years||5.70||6.20||0.50|
|Federal bank||Above 1 year to 10 years||6.25||6.75||0.50|
|Punjab National Bank||1 year to 10 years||5.75||6.25||0.50|
Sbi Deposit Rate
The table indicates that three banks HDFC Bank (6.50%), IndusInd Bank (7.50%) and Federal Bank( 6.75%) offer same/ better interest rates to senior citizens. However, the senior citizen benefit offered by them continue to be 0.5% compared to 0.80% announced by SBI.