State Bank Of India Interest Rate for Senior Citizens
As one grows older, securing a stable financial future becomes a top priority. To cater to the needs of senior citizens, State Bank of India (SBI) offers a specialized Recurring Deposit (RD) scheme. Find here all the details about SBI Recurring Deposit Scheme for senior citizens.
Purpose of the SBI Recurring Deposit Scheme for Senior Citizens
The primary aim of this scheme is to provide senior citizens with a steady source of income that can aid them in meeting their financial needs. The scheme aims to provide an attractive rate of interest on deposits made by senior citizens, which can help them in building a corpus of funds for their future.
| SBI Senior Citizen RD | Features |
|---|---|
| Eligibility | Applicant must be of 60 years of age or above |
| Amount of RD | Minimum Rs.100 per month and in multiples of Rs.10 thereof, no limit on maximum amount |
| Tenure | Minimum 12 months and Maximum 120 months |
| Nomination Facility | Nomination available in favour of individual only |
| Loan Facility | Loan/ OD against deposit is available. |
| TDS | Applicable as per prevailing Income Tax rules. The Bank will issue TDS Certificate for the tax deducted. |
| Penalty for Delayed Payment | Up to Rs.2 per Rs.100 installment per month |
| Transferability | Transferability is allowed among SBI branches |
SBI Senior Citizen RD Interest Rates 2024
The interest rate offered under this scheme is among the highest in the market and it is subject to revision from time to time. Currently, the interest rate for the SBI Recurring Deposit Scheme for senior citizens ranges between 7.30% and 7.50% per annum, which is 0.50% higher than the regular RD scheme. This interest rate is subject to change and depends on the prevailing market conditions.
| RD Tenure | Interest Rate |
|---|---|
| 12 Months | 7.30% |
| 15 Months | 7.30% |
| 24 Months | 7.50% |
| 27 Months | 7.50% |
| 36 Months | 7.25% |
| 39 Months | 7.25% |
| 42 Months | 7.25% |
| 48 Months | 7.25% |
| 54 Months | 7.25% |
| 60 Months | 7.50% |
| 90 Months | 7.50% |
| 120 Months | 7.50% |
SBI Senior Citizen RD Account Eligibility Criteria
To be eligible for the SBI Recurring Deposit Scheme for senior citizens, the applicants must be a senior citizen which means they should be 60 years or above.
SBI Senior Citizen RD Account Documentation
To apply for the SBI Recurring Deposit Scheme for senior citizens, one needs to submit the following documents:
- Identity proof, which can be a Voter ID card, PAN card, Aadhaar card or Passport.
- Address proof, which can be a Voter ID card, Aadhaar card or passport.
- Age proof, which can be a birth certificate or any government-issued document that states the applicant's age.
- Passport size photograph.
SBI Senior Citizen RD Amount Minimum Amount
The minimum amount required to open an RD account under this scheme is Rs.100 p.m.(thereafter in multiples of Rs. 10/-). Penalty is charged on delayed payment of instalments.
| SBI Senior Citizen RD | Amount |
|---|---|
| Minimum monthly instalment | Rs.100 |
| Additional monthly instalment | Rs.10 thereof |
| Maximum monthly instalment | No upper limit |
SBI Senior Citizen RD Account Tenure
The minimum tenure for the SBI Recurring Deposit Scheme for senior citizens is 12 months and the maximum tenure is 120 months. However, premature withdrawals are allowed, but the interest rate applicable in such cases will be lower than the rate applicable for the entire tenure.
| SBI Senior Citizen RD | Amount |
|---|---|
| Minimum Tenure | 12 months |
| Maximum monthly instalment | 120 months |
SBI Senior Citizen RD Account Premature Closure
In case 6 consecutive instalments are not received by the SBI, the account shall prematurely be closed by the bank and balance amount in RD will be paid to the account holder.
Benefits of the SBI Recurring Deposit Scheme for senior citizens
- High-interest rate: The interest rate offered under this scheme is higher than regular RD schemes.
- Tax benefits: Senior citizens can claim a deduction of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961 on the amount invested in this scheme, if the RD tenure is of atleast 5 years.
- Flexible Tenure: The scheme offers a flexible tenure ranging from 1 year to 10 years.
- Nomination facility: The scheme allows nomination facility to ensure the easy transfer of the RD amount to the nominee in case of the depositor's unfortunate demise.
- Transferable: Transferability allowed among our branches.
Defaulting on Payment of Installment
Defaulting on payment of installment can lead to penalty charges on the RD account. In case there is defaulted payment of multiple installments, the bank may close the recurring deposit account and return the investment to the account holder.
| SBI Senior Citizen RD | Penalty |
|---|---|
| RD tenure of 5 years or less | Rs.1.50 per Rs.100 installment per month |
| RD tenure of more than 5 years | Rs.2 per Rs.100 installment per month |
SBI Recurring Deposit Scheme for senior citizens is an excellent investment option for those who want to secure their financial future. The scheme offers an attractive interest rate, flexible tenure and tax benefits and so it is an ideal investment option for senior citizens. Additionally, the nomination facility facilitates that the depositor's family members do not face any inconvenience in case of their untimely demise. Hence, this scheme can be a valuable addition to a senior citizen's investment portfolio.
How to Open Recurring Deposit Account with SBI for Senior Citizens?
You can choose any of the following ways to open a Recurring Deposit with SBI:
Option 1: How to Open SBI Recurring Deposit Account using Branch Visit?
By visiting the nearest SBI branch and any of the representatives will guide you through the RD account opening process. you need to carry required documents for opening of RD.
Option 2: How to Open SBI Recurring Deposit Account using Internet Banking?
This option is available for existing customers having operative saving/ current account with SBI. Applicable to Internet Banking Users only. If you are not an SBI account holder, you need to first open an account with the SBI. After activation of the account, you can use the net banking facility and open an e-RD.
- Log into SBI internet banking account using your internet banking credentials i.e. your user ID and password. Also enter captcha code in the box.
- Go to the 'My Accounts' section.
- Select the 'Open Recurring Deposit' option.
- Follow the instructions in order to open RD account online.
State Bank of India Senior Citizens RD Calculator
You can use SBI Senior Citizens RD calculator to help you estimate your returns. Here's how you can use it:
- Monthly Investment Amount: Decide how much you want to invest every month.
- Tenure: Choose the duration for which you plan to invest in the RD.
- Interest Rate: SBI currently offers an interest rate as mentioned in the above table based on its tenure.
Using the SBI RD Calculator, you can calculate:
- The total amount deposited by you at the end of the tenure.
- The maturity value (total corpus) at the end of the tenure.
- The aggregate interest amount which you will earn over the investment period.
Rules & Regulations for Recurring Deposit
- Depositor Needs to fulfil KYC norms as per RBI directive.
- Senior Citizen interest rates are applicable only for domestic deposits.
- The depositor has to deposit the monthly installments regularly till the maturity of RD account.
- In case the depositors failed to deposit Installment regularly, penalty will be levied.
- The maturity proceeds of the RD account is usually paid with in 30 days from the date of last instalment deposited.
- It is very important to submit your maturity instructions which should be clear. If you want the RD amount to be credited to your savings account or to be used in opening of a fixed deposit, you need to inform the bank in advance.
- Standing instruction will be accepted for transfer of monthly installments from other accounts maintained by the account holder.
- Penalty will be applicable, if the amount is withdrawal before maturity.
Factors to Consider Before Applying for Recurring Deposit
- Tenure of recurring deposit account
- Interest rate offered by the bank
- Conditions for premature withdrawal
Documents Required for State Bank Of India RD for Senior Citizens
- Identity Proof (any one): Passport, Driving License, Voter ID Card, Government Approved College/university I.Card, Government/Semi government/Department I.Card Aadhar Card
- Address Proof(any one): Electricity Bill (not more than 2 months old), BSNL Landline Telephone Bill (not more than 2 months old), Municipal Tax Bill, Voter ID card, Aadhaar card, or passport, other proof acceptable by Bank.
- Passport Size Photograph: 2 Copies
- Pan Card or / Form 60 or 61 (if customer does not have PAN Card)
- Form 15H to avoid TDS
- Age Proof Certificate: which can be a birth certificate or any government-issued document that states the applicant's age.
Rules for Renewal of Recurring Deposit
Renewal of RD is a simple process. Renewal of the RD is one of the most common options available to the depositors after the maturity of an RD. Senior citizens should be aware of the rules for the renewal of RDs before investing in them. They should check the tenure, renewal options, terms and conditions, premature renewal, etc. to make an informed decision. A well-researched investment can provide financial security and peace of mind to senior citizens.
- Depositors can choose to renew their RD for the same duration or for a different duration.
- Depositors have the facility to renew their RD either online or by visiting their bank branch.
- No additional documentation is required for renewal if the RD is automatically renewed or if you are renewing it through the bank's online platform. However, minimal documentation may be needed if you are doing manual renewal at the branch.
- Some banks have the option of auto-renewal of RD. Auto-renewal of RD means that the renewal of the RD will happen automatically on the date of maturity for the same duration as the original RD. The interest rate applicable will be the prevailing rate at the time of renewal.
- The interest rate for the renewed RD will be based on the rates prevailing at the time of renewal. It is important to know that the current rates may differ from the rates of your original RD.
- If you need funds, some banks allow partial withdrawal of the RD amount before renewal.
- The interest earned on the renewed RD will be subject to tax and you need to consider the same for the accounting purpose.
Safety of Recurring Deposit Funds
The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the central bank, guarantees investments in recurring deposits of up to Rs 5 lakh for all the member banks.
Tax Benefit under State Bank Of India RD for Senior Citizens
It is important to note that senior citizens can claim a tax deduction of up to Rs. 1.50 lakh under Section 80C of the Income Tax Act, 1961, on the amount invested in RD schemes for senior citizens, if the RD tenure is atleast 5 years. This tax benefit makes these schemes more attractive to senior citizens who are looking for safe investment options that offer tax benefits.
TDS Under State Bank Of India RD for Senior Citizens
Senior citizens need to understand the tax implications of investing in RDs before making any investment in RD. Tax Deducted at Source (TDS) is a tax that is deducted from the interest earned on an RD. In this article, we will discuss the TDS rate on Recurring Deposit for senior citizens.
The TDS rate on Recurring Deposit for senior citizens is 10% of the interest earned, provided that the interest income is more than Rs. 50,000 per annum.
This limit was increased from Rs. 10,000 to Rs. 50,000 in the 2018 Union Budget, providing relief to small depositors. It is important to note that this limit is applicable to the total interest earned by the senior citizen in a financial year, including interest from savings accounts, fixed deposits, and recurring deposits.
Senior citizens can avoid TDS by submitting Form 15H to the bank. This form is a declaration stating that the senior citizen's total income for the financial year is below the taxable limit, and hence no TDS should be deducted. It is important to note that Form 15H needs to be submitted to each bank where the senior citizen holds an RD account.
If TDS is deducted from the senior citizen's RD account, they can claim a refund by filing their income tax return. The TDS amount will be considered as advance tax paid by the senior citizen and will be adjusted against their final tax liability. If the TDS amount is more than the final tax liability, the senior citizen can claim a refund of the excess amount.
Role of Senior Citizens RD in Financial Planning
No Risk of Loss
RDs does not have any risk of principal loss unlike stocks or mutual funds. The invested amount is safe and the returns are assured. This feature is particularly important for retirees who cannot afford to lose their savings.
Creation of Big Corpus
The maturity amount from RDs can be used as a supplementary income after retirement. It can be used to meet regular expenses, medical bills or any other financial needs.
Tax Benefits
Investments in RDs for the tenures 5 years and above also come with certain tax benefits under Section 80C of the Income Tax Act for providing additional financial relief for retirees.
Supplementary Income
If you invest the funds accumulated under RD account in any systematic withdrawal plan or monthly income plan, then you can use it as an additional monthly income in addition to any pension income which you receive.
Flexible Tenure
RDs offer flexibility in selecting tenure which allows senior citizens to choose a period according to their financial goals. Whether it's short-term goals or long-term targets, the investors can select an RD tenure that suits their needs so that the funds can be available when required.