Sbi Wecare Deposit
Jan 15, 2021 The SBI 'WECARE' Senior Citizens' Term Deposit scheme has been launched to provide the higher interest rate to senior citizens in the current falling interest rate scenario as this category of investors are usually dependent on interest income. SBI takes pride in its association with Senior Citizens and introduces new Deposit Scheme “SBI WECARE’ protecting their income by offering additional interest on Term Deposits. The salient features of scheme are: S.N. DESCRIPTION FEATURES 1 Purpose Protecting income of Senior Citizens by providing additional interest on their Term Deposits. SBI Wecare Deposit: State Bank of India's Special Fixed Deposit Scheme for Senior Citizens From Today, Check New FD Rates Here Amid the COVID-19 crisis, the SBI will give a higher interest rate to senior citizens under a fixed deposit scheme known as 'SBI Wecare Deposit'. The new scheme will be effective from Tuesday, May 12. State Bank of India (SBI) has launched a special fixed deposit (FD) scheme for senior citizens named as “SBI Wecare Deposit”. The scheme has been launched keeping in view the welfare of the Senior Citizens of the country in view of the situation arising out of pandemic crisis and the future uncertainties.
The country’s largest banker, State Bank of India (SBI), recently announced a special fixed deposit scheme for senior citizens called, SBI ‘WECARE’ Senior Citizens’ Term Deposit scheme. The scheme is available for investment from today i.e. May 12, 2020.
SBI offers senior citizens’ an additional 50 bps interest rate across all tenors. After the latest revision, senior citizens will get 3.8% to 6,5% on FDs maturing in 7 days to 10 years.
SBI had slashed the interest rate on FDs by 20-50 bps across tenors effective March 28 in the second rate cut in March. The bank had cut interest rates on FDs on March 10.
According to the bank, the scheme has been launched to provide a higher interest rate to senior citizens in the current falling interest rate scenario as this category of investors are usually dependent on interest income. The launch of this scheme comes in the wake of several banks cutting interest rates on fixed deposits and savings bank accounts due to the Reserve Bank of India (RBI) cutting repo rate and reverse repo rate.
Sbi Wecare Deposit Scheme
Here are the main features of the newly-launched scheme.
Who can invest in this scheme?Only resident senior citizens aged sixty years and above are eligible to invest in this scheme. The scheme is a domestic term deposit, therefore NRI senior citizens are not eligible to invest in the scheme.What is the interest rate applicable to the scheme?
As per the details of the scheme available on the SBI website, the scheme will fetch 0.8 per cent above the interest rate applicable to the general public. For instance, with effect from May 12, 2020, the interest rate on five years fixed deposit for the general public is 5.70 per cent. If a senior citizen puts a fixed deposit under the special FD scheme, then interest rate applicable to the FD will be 6.50 per cent.
The SBI website says, ‘ Additional premium of 30 bps (over and above existing premium of 50 bps) over card rate for public‘. This would mean that any revision in the fixed deposit interest rates applicable to the general public in the future is likely to impact the interest rate applicable on the ‘WECARE’ fixed deposit scheme. (100 bps = 1%)
What is the tenure of FDs placed under the scheme?
A fixed deposit investment under this special scheme can be made for a minimum of five years and a maximum of 10 years.
How is interest payable as per the scheme?
Interest on fixed deposits under this scheme will be payable at monthly or quarterly intervals. The scheme details available on SBI’s website do not clarify whether the senior citizen has the option of receiving the interest payment at half-yearly or yearly intervals.
SBI is also yet to clarify whether a fixed deposit investor can opt for the cumulative option for the interest on the fixed deposit. Normally, under the cumulative option, interest on a fixed deposit is payable along with the principal amount at the time of maturity.
Remember the interest, credited to the investor’s bank account, will be net of taxes deducted by the bank. For senior citizens, TDS will be deducted if the total interest in a financial year exceeds Rs 50,000. The total of interest earned on all fixed deposits, recurring deposits or any other deposits held with the bank would be taken into account for the purpose of TDS. Interest credited in a savings bank account is not subject to TDS.
Last date of investing in the scheme
The scheme is open between May 12, 2020, and September 30, 2020.How to invest in the scheme?
Sbi We Care Deposit Scheme
A senior citizen can invest in the scheme by visiting a SBI bank branch. Existing customers of SBI can also place the FD via net banking and/or via Yono app of the bank.Loan against fixed deposits
In case of emergency, a senior citizen can take a loan against the fixed deposits, as per the SBI website.Premature withdrawal of the FDs under the scheme
As per the bank’s press release, the additional interest i.e. 30 bps under the scheme will not be payable in case of premature withdrawal of the fixed deposit placed under the scheme. Therefore, if you opt for premature withdrawal of a FD under the scheme, your fixed deposit investment will fetch only 0.50 per cent above the interest rate applicable to the general public i.e. 6.20 per cent.Sbi Wecare Deposit Rates
Should you invest in the scheme?
If a senior citizen is looking for reasonable return as well as safety of his/her principal money, then there are other options as well that are offering higher interest rate as compared to SBI special FD.For instance, senior citizens savings scheme (SCSS) is currently offering 7.4 per cent per annum. The interest rate differential between SBI FD and SCSS is 0.90 percent. SCSS also allows premature withdrawal albeit by paying some penalty. The tenure of the SCSS scheme is also five years.
As per the SCSS rules, if the scheme account is closed before 1 year, no interest will be payable and will be recovered if already paid. If the account is closed after one year, then an amount equal to 1.5% of the deposit is to be deducted. Similarly, if the scheme account is closed after 2 years, then 1% of the deposit will be deducted. The maximum amount that can be deposited in the scheme is Rs 15 lakh.
Interest rates on different schemes available to senior citizen
| Scheme Name | Interest Rate (%) |
| SBI Special FD scheme | 6.50 |
| Senior Citizen Savings Scheme | 7.40 |
| Post office Monthly Income Scheme | 6.60 |
| Five Year post office time deposit | 6.70 |
| RBI taxable bonds | 7.75 |
Other post office schemes such as five-year post office time deposit is currently offering 6.7 per cent and Post office monthly income scheme account is offering 6.6 per cent per annum which is slightly higher than the interest rate on SBI special FD for senior citizens.
Another option is RBI’s 7.75 per cent taxable bonds. The interest rate differential right now is 1.25 per cent. Though the bonds have a tenure of seven years, however, senior citizens do have the option of premature withdrawal.
For a senior citizen aged between 60 to 70 years, the lock-in period is six years from the date of issue. For those aged between 70 to 80 years, the lock-in is for five years and for any senior citizen above 80 years of age, a four year lock-in will be applicable. The cost of premature withdrawal is 50% of interest due and payable for the last six months of the holding period will be recovered in such cases, both in respect of cumulative and non-cumulative bonds.
Therefore, a senior citizen should evaluate all the features of the scheme and not just interest rate before making any investment.
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 Rate
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.
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?
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 |
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.