SBI Scheme: According to the information available on SBI website, senior citizens deposit in SBI’s FD scheme for maturity ranging from 7 days to 10 years.
SBI Scheme: Generally, as age increases, the ability to take risk regarding investment reduces. After retirement, no common investor wants to take any kind of risk with his money. It is true that after being a senior citizen, one cannot take risk on money, but it is not that the options for making money from money get eliminated.
There are many bank deposits and government schemes for fixed and guaranteed income for senior citizens. One of these is the Senior Citizen Term Deposit Scheme of State Bank of India (SBI). If you have recently retired and have got a good amount of funds, then investing in SBI Senior Citizen FD Scheme is a better option from a long-term perspective.
SBI FD Rates 2023: How much benefit to senior citizens
According to the information available on SBI website, senior citizens can deposit in SBI’s FD scheme for maturity ranging from 7 days to 10 years. Generally, senior citizens get half a percent (0.50%) more interest on fixed deposits than regular customers. Whereas, on FDs of 5 years to 10 years, senior citizens get 1 percent more interest.
According to the SBI website, regular customers are getting 6.5 percent annual interest on FDs of 5 years to 10 years, while the bank is offering 7.5 percent annual interest to senior citizens. Actually, senior citizens get additional half percent premium interest under SBI We-care deposit scheme on FD of 5 to 10 years.
SBI FDs: ₹10 lakh will become ₹21 lakh in 10 years
Suppose, a senior citizen deposits Rs 10 lakh in lump sum in SBI’s scheme with 10 years maturity. According to SBI FD Calculator, the investor will get a total of Rs 21,02,349 on maturity at 7.5 percent annual interest rate. In this, there will be fixed income of Rs 11,02,349 from interest.
Let us tell you, SBI has increased the interest rates on deposits of less than Rs 2 crore by 0.25 percent from February 15, 2023. Along with making loans expensive, banks are also increasing interest rates on deposits. Earlier, SBI had increased the interest rates on FD on December 13, 2022.
SBI FDs: Interest income taxable
Fixed deposits/term deposits of banks are considered safe. This is a good option for investors who do not take risk. Tax exemption under Section 80C is available on 5 year tax saving FD. However, the interest received from FD is taxable.
According to Income Tax Rules (IT Rules), Tax Deduction at Source (TDS) is applicable on FD schemes. That is, the amount received on maturity of FD will be considered as your income and you will have to pay tax as per the slab rate. According to IT rules, the depositor can submit Form 15G/15H for exemption from tax deduction.