Fixed deposits (FD) are a preferred investment instrument for millions simply because they offer predictable and stable returns. They are also far more stable than market-linked instruments and returns are never volatile.
Preferential interest rate
State Bank of India, or SBI, is the biggest bank in the country. Crores of people entrust this bank with their hard-earned money. Most of them draw interest income on a monthly and quarterly basis from this bank. Like all other banks SBI, too, offers preferential rate of interest to its senior citizens.
The highest interest rate is available from an FD that is branded Amrit Kalash. It offers an interest rate of 7.75%. The duration of this FD is fixed – 400 days.
Amrit Kalash returns
The interest that an FD under this scheme will fetch for Rs 3 lakh deposit will be close to Rs 25,801. The interest incomes for deposits of Rs 5 lakh and 10 lakh would be Rs 43,002 and Rs 86,005 respectively.
FD of longest duration
The interest rate senior citizens are entitled to for FDs of duration 5-10 years is 7.50%. Therefore, the interest income a senior citizen can expect from Rs 3 lakh, 5 lakh and 10 lakh deposits for a maturity period of 5 years are Rs 1,34,984, Rs 2,24,974 and Rs 4,49,948 respectively. The total amounts at maturity would come to Rs 6,34,984, Rs 7,24,974 and 14,49,948 respectively.
If the same amounts (Rs 3 lakh, 5 lakh and 10 lakh) are invested for the maximum period of 10 years, a senior citizen would earn interests of Rs 3,30,704, Rs 5,51,174 and Rs 11,02,349 respectively. The total maturity amounts in this case would translate to Rs 6,30,704, 10,51,174 and Rs 21,02,349.
1 year FDs
The duration of “1 year to less than 2 years” fetches the next highest interest rate – 7.3%. Rs 3 lakh invested in this basket for 1 year would fetch an interest of Rs 22,06 and the maturity amount will be Rs 1,22,506. If Rs 5 lakh is invested for 1 year the interest income would be Rs 37,511 and the maturity payment will be Rs 5,37511. By depositing Rs 10 lakh for a year in this FD a senior citizen would earn Rs 75,022. The maturity payment will be Rs 10,75,022.
Who doesn’t need regular cash flows every month from investments? The need is acute for senior citizens who cannot work to earn any longer. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
