In sync with the wealth of experience and wisdom that accompanies their years, super senior citizens, i.e., those 80 years and above, can look forward to preferential interest rate on bank fixed deposits in select banks. Besides, they may also enjoy liquidity in the form of overdraft facility, waiver on premature penalty charges, and other facilities. Here is a lowdown.
What’s on offer
RBL Bank, Union Bank of India, PNB and Indian Bank offer higher interest rates on FDs opened by super senior citizens.
RBL Bank’s Super Senior Citizen fixed deposits offer preferential interest rate of 75 bps (basis points) p.a. for all tenures (7 days to 20 years).
Likewise, Union Bank of India offers additional rate component to resident super senior citizens on term deposits up to ₹5 crore in all of its domestic term deposits scheme. The additional rate component applicable to resident super senior citizens is 75 bps over and above the normal rate displayed above (25 bps over and above rate applicable to resident senior citizen).
PNB offers super senior citizens an additional rate of interest of 80 bps over applicable card rate across all maturity buckets. In case of staff members as well as retired staff members who are also super senior citizens, maximum rate of interest to be allowed over applicable card rate is 180 bps over applicable card rate across all maturity buckets.
In case of Indian Bank, there are two ways in which super senior citizens can get extra interest. One, special deposit scheme ‘IND Super 400 Days’, which has been extended till June 30, 2023, offers super seniors 8 per cent (75 bps over public rates and 25 bps over senior citizen rates). Two, ‘IB – Golden Ager’ special term deposit account for super senior citizen offers additional 25 bps higher rate of interest over and above the additional rate that is presently being offered for normal senior citizen on term deposit for all deposit buckets. The minimum tenure is 7 days and maximum is 10 years.
On a different note, Central Bank of India offers ‘Cent Super Non-Callable Time Deposit for 444 days’ scheme where super seniors can get 100 bps and ex-staff super seniors can get 200 bps more interest, according to their website. While premature withdrawal is allowed, it will attract penalty of 2.5 per cent on the applicable rate of interest for running period of the time.
To be eligible for schemes for super senior citizens (age 80 years or above), one has to show age proof as on the date of opening of account. Any valid KYC document containing age/date of birth as per existing KYC policy of RBI can be accepted as proof of age. Birth certificate or any other valid proof containing age/date of birth can also be accepted as proof of age by banks.
The higher rate for super seniors is typically on domestic term deposits below a certain level (₹2 crore/10 crore) depending on the bank. Typically, super senior citizen rates are not applicable on non-resident deposits (NRE/NRO), though some special schemes may allow non-residents. Super senior FDs can be opened through online/offline mode.
Some banks allow super senior citizens to take advantage of special deposit schemes if account is self-only operated (no joint account allowed). This could prove to be problematic if the super senior suffers from health issues now or in future, and is not able to operate the account on his/her own.
While banks such as RBL may not charge premature withdrawal penalty, ‘IB - Golden Ager’, according to their website, levies charges as applicable to normal deposits if there is premature closure. Such charges could shave away the incremental return on special schemes if there is premature closure. Hence, super seniors should only park deposits in these schemes that in ordinary course of business wouldn’t be needed.
Super seniors may get liquidity with Overdraft (OD) facility upto 90 per cent of the principal value on super senior citizen FDs. But do look at the rate of interest on the OD. A rate of 2 per cent over the interest paid on deposit could be charged for OD.
Super seniors should note that in case any ongoing special deposit scheme for them is discontinued, the deposits maturing thereafter placed under the special product could automatically be rolled over to general senior citizen product under the respective maturity bucket.