Sbi, Centurion Offer Better Rates For Senior Citizens
Senior citizens can now hope to beat inflation from eating into their interest income, thanks to the introduction of special fixed deposit schemes by commercial banks.
State Bank of India (SBI) and Centurion Bank are offering the best interest rates to senior citizens in the wake of the Reserve Bank of India's (RBI) decision to allow banks to offer higher interest rates to senior citizens.
While Centurion is offering an uniform interest rate of 11.25 per cent on deposits of one to five years maturity, the SBI is offering one per cent higher interest on term deposits for 1 year and above and below 3 years. For maturity period of 3 years and above, the rate of interest offered is 0.75 per cent higher than the normal rate of interest for term deposits.
SBI is offering 9.50 per cent on term deposits (8.50 per cent on normal deposits) of between one and two years duration. It is offering 10 per cent interest for deposits of tenor between two to three years while for deposits of above three years period it is offering 11.25 per cent interest (9.50 per cent).
Corporation Bank, Punjab National Bank, Union Bank of India and Canara Bank are offering 9 per cent (8.50 per cent on normal deposit) on one-two year maturity deposits and 9.50 per cent (9 per cent) on two-three year deposits. For three years and above duration, these banks are offering 10 per cent (9.50 per cent).
The only other private sector bank to come out with a senior citizens scheme is IndusInd Bank. It is offering one per cent higher interest rate than the normal deposit rate. Deposits in the one year to 18 months bracket, 18 months and above to three years bracket and over three years carry an uniform rate of 11 per cent.
"We expect senior citizens to shift their fixed deposits (FDs) to the special schemes. All banks will necessarily have to come out with the scheme else they face the danger of flight of deposits to other bank," said a public sector bank official. He added that it was difficult to quantify the amount of deposits that will shift to the special scheme.
With the Indian Banks' Association (IBA) clearing the air regarding the eligibility criteria of 60 years, many more banks are expected to join the bandwagon.
Majority of the banks are asking for a minimum deposit of Rs 10,000. Some of them have announced several add-ons to the special term deposit holders such as free issue of demand drafts and collection of cheques up to specified amounts. They are also offering concessions in locker rentals.