HDFC Bank is offering higher rate of interest on FDs tosenior citizens.
The bank has extended this scheme till June 30, 2021.
Titled ‘Senior Citizen Care FD Scheme’, the scheme waslaunched about a year ago when interest rates began falling. The bank claimsthe same was launched to take care of senior citizens so that they do not haveto suffer.
It must be noted that risk-free interest rates are on thedecline. When earlier the savings bank (SB) interest was around 4% per year,not it is below 3%.
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With this background in mind, the FD rate provided to asenior citizen is 6.25% per year under this scheme for an FD of less than Rs 5crore. The tenure required for the same is 5 years to 10 years. For a Rs 1 lakhFD, total interest earned is Rs 38,042 with the final maturity value (beforeany tax deduction) is Rs 1,38,042
For comparison, for similar terms and conditions, theinterest rate provided by Canara Bank is 6%. For a Rs 1 lakh FD, total interestearned is Rs 34,686 here with the final maturity value (before any taxdeduction) is Rs 1,34,686
Thus, we see that a 0.5% increase in the FD rate gave use Rs3,356 more on Rs 1 lakh FD for a five years tenure.