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SBI Senior Citizen Fixed Deposit Scheme – SBI FD Scheme

State Bank of India launched SBI senior citizen fixed deposit scheme (FD) in 2020. The scheme is meant for senior citizens of the country. From May 2020 the scheme is available for investment. The last date to invest in the scheme is 31 of March 2021.

According to the SBI, the plan was launched to provide senior citizens with higher interest rates in the current event of lowering interest rates, because this category of investors is usually dependent on interest income. 

The launch of this FD plan came after many banks cut fixed deposits and savings account interest rates because the Reserve Bank of India (RBI) lowered the repo rate and reverse repo rate.

SBI Senior Citizen Fixed Deposit Scheme

The main features of the SBI senior citizen fixed deposit scheme are:

Eligibility for SBI Senior Citizen Fixed Deposit Scheme

Resident citizens of India who are sixty years and above can invest in this FD scheme. The plan is available for the citizens living in India. NRI senior citizens are not allowed to invest in this FD scheme.  

What is the Tenure Period for the SBI Senior Citizen Fixed Deposit Scheme

The minimum tenure of investment made under a senior citizen fixed deposit plan is five years and a maximum of 10 years. So you can invest in the scheme for a five or ten-year period.

Senior Citizen Fixed Deposit Scheme Interest Rate

According to the scheme details available on the State Bank of India’s website, the investment made under this scheme will get a 0.8 percent more interest rate applicable to the general public. For example, from January 08, 2021, the interest rate for the general public on fixed deposits for five years is 5.40 percent. 

But for senior citizens who invest and put deposits under this special fixed deposit plan the interest rate applicable will be 6.2 percent.

According to the State Bank website the addition of a premium of 30 bps (above the current premium of 50 bps) over the public card rate. This means that in the future any revision of the fixed deposit interest rate applicable to the general public is likely to affect the level of interest rates applicable to the senior citizen fixed deposit scheme (1%=100 points).

How Interest is Paid Under this Scheme?

Under the senior citizen fixed deposit scheme the interest on investments will be paid on a monthly or quarterly basis. It is not clear in the details about the scheme available on the State Bank website that whether senior citizens who invest in the scheme have an option to receive interest amount half-yearly or yearly basis. 

The State Bank also did not explain whether investors could choose the option of accumulated interest rate on FD amount. Generally, for accrued options, interest is usually paid on fixed deposits together with the principal amount at the time of maturity.

Please note that the bank will deduct the taxes from the interest which is credited into the bank account of the investor. For senior citizens, if the total interest amount is more than Rs 50,000-00 in a financial year then tax deducted at source (TDS) will be deducted. The amount of interest on all fixed deposits, recurring deposits, or other deposits with the bank will be calculated for TDS purposes. Interest transferred to a savings account is not subject to TDS.

Also Read: Post Office Savings Scheme India

How to Invest in Senior Citizens FD Scheme?

A senior citizen who wants to invest in the SBI senior citizen fixed deposit scheme can invest by visiting a State Bank branch and fulfill the necessary documentation for this purpose. Citizens who are already customers of the SBI can get the fixed deposit scheme with net banking or through the Yono online application of the bank.

What is the Last Date of Investing in the Scheme?

SBI senior citizens fixed deposit scheme was launched on 12 May 2020. The last date to invest in this FD scheme is 31 March 2021.   

Loan Against FDs

As per the scheme details available on the SBI website a senior citizen can get a loan against the FD amount invested in the scheme in the event of an emergency. Thus an investor can take loan against fixed deposits. 

Premature Withdrawal of the Fixed Deposits

According to the State Bank of India’s notice if any investor who invested in this scheme withdrawal the fixed deposits before the maturity of the scheme he will not get the additional interest i.e. 30 bps under this scheme. 

Therefore opting for premature withdrawal of fixed deposits under the plan an investor’s fixed deposit investment will receive only 0.50% above the interest rate applicable to the general public i.e. 5.90 percent.

Should You Invest in SBI Fixed Deposit Scheme

As a senior citizen if you are looking for good returns as well as safety of your invested amount then other investment options are also there that offer high-interest rates as compared to SBI fixed deposit scheme. 

For example, the post office senior citizens saving scheme (SCSS) is currently offering interest at 7.4% per year. The difference between the interest rate of the SBI fixed deposit scheme and post office SCSS is 1.20%. SCSS allows an investor to withdrawal the invested amount prematurely by paying some penalty. The maturity period of SCSS is also five years.

According to SCSS rules no interest will be paid to the investor if he/she closed the account before 1 year. If interest is already paid will be recovered. An amount equal to 1.5 percent of the deposited amount will be deducted if the account is closed after one year. Similarly, 1 percent of the deposited amount will be deducted if the SCSS account is closed after 2 years. In SCSS you can deposit a maximum of Rs. 15 lakhs. 

Different Scheme’s Interest Rates Available to Senior Citizens         

Name of the Scheme Rate of Interest 
State Bank of India special FD scheme 6.20%
Post office SCSS (senior citizens savings scheme) 7.40%
Monthly income scheme of India post 6.60.%
5 years time deposit scheme of post office 6.70%
RBI floating rate taxable bonds 7.15%
PMVVY (Pradhan Manrti Vaya Vandana Jojana 7.40%


The State Bank of India started the special FD scheme in May 2020 to provide good returns for senior citizens. The SBI senior citizen fixed deposit scheme provides an interest rate at 80 basis points (bps) for senior citizens. This is above the rate of interest that the bank offers to the general public. 

At present the State Bank of India provides a 5.4 percent interest rate on five years fixed deposit for the general public. But the special fixed deposit scheme provides a 6.20 percent interest rate for senior citizens. There are also other schemes for senior citizens like the post office senior citizens savings scheme that yield good returns.

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