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SBI’s Senior Citizen FD Scheme Is A Smart Investment Choice

The State Bank of India (SBI), the largest public sector bank in India, offers a compelling proposition for senior citizens through its Senior Citizen Term Deposit Scheme. As retirement beckons and the appetite for financial risk diminishes, SBI’s scheme emerges as a beacon of stability and attractive returns. 

Interest Rates Advantage 

SBI’s FD scheme for senior citizens provides a substantial interest rate advantage, making it a standout choice in the market. Typically, senior citizens enjoy an additional 0.50% interest on fixed deposits compared to regular customers. What sets SBI apart is the lucrative 1% extra interest on FDs with maturities ranging from 5 to 10 years. For instance, while regular customers receive 6.5% annual interest on a 5 to 10-year FD, senior citizens enjoy a generous 7.5% annual interest, thanks to SBI’s We-care deposit scheme.  

Calculating the Returns 

To delve into the numbers, imagine a senior citizen making a prudent investment of Rs 10 lakh in a 10-year maturity scheme at SBI’s prevailing interest rate of 7.5%. According to the SBI FD Calculator, the maturity amount after a decade would be a substantial Rs 21,02,349. This includes a fixed income of Rs 11,02,349 derived from interest alone. 

Comparative Analysis 

In comparison, other major banks such as Axis Bank and HDFC Bank, offering interest rates of 7.75% on 5-year tenures, marginally outperform SBI in the 5-year maturity segment. However, SBI’s thoughtful offering, backed by the trust of the Government and the stability of a public sector bank, positions it as the preferred choice for senior citizens seeking stability and substantial returns, positioning it as the go-to choice for senior citizens seeking stability and substantial returns. 

Bank Name  Interest Rates (5-years tenure)  FD after 5 years (Rs)  FD after 10 Years (Rs) 
Axis Bank  7.75%  14,67,843  21,54,563 
HDFC Bank  7.75%  14,49,986  21,54,560 
State Bank of India  7.50%  14,49,948  21,02,349 
ICICI Bank  7.50%  14,49,948  21,02,349 
Bank of India  6.90%  14,07,842  19,82,020 
Kotak Mahindra Bank  6.70%  13,94,066  19,43,422 

Read: Comprehensive Analysis of HDFC Bank’s PAT growth

Recent Interest Rate Hike 

SBI’s commitment to offering competitive returns is evident in its recent move to increase interest rates by 0.25% starting from February 15, 2023, for deposits less than Rs 2 crore. This strategic adjustment aligns with the bank’s effort to strike a balance between making loans costlier and ensuring the attractiveness of deposit schemes. 

Tax Considerations 

While the safety of fixed deposits is undisputed, it’s essential to note the tax implications. Though tax exemption under Section 80C is available for 5-year tax-saving FDs, the interest earned is taxable. SBI, in line with Income Tax Rules, implements Tax Deduction at Source (TDS) on FD schemes. However, depositors can opt for Form 15G/15H to seek exemption from tax deductions. 


In essence, SBI’s Senior Citizen Term Deposit Scheme emerges as a robust choice, not just due to its size but also its commitment to offering senior citizens a secure and lucrative investment avenue. The bank’s recent interest rate adjustments further solidify its position as a reliable financial partner for those navigating the post-retirement financial landscape. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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