Author: root

Tips to save on motor insurance premium

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Do you own a four-wheeler but find commuting via public transport on a daily basis more feasible than driving? Or are you someone who owns more than one vehicle but usually drives one of them more than the others? If yes, here are a few tips for you to save on your motor insurance premium.

Pay as you go: Usage-based or telematics car insurance is a relatively new concept in India but is gradually gaining popularity. Traditionally, motor insurance is determined by the make and model of the car, and not by the driving behaviour of the customer.

‘Pay as you drive’ model emphasises the driving behaviour and usage (distance covered) of the car. Premium calculation based on this can help bring down your premium cost compared to when computed conventionally.

Insurers will shortly be looking at introducing products where premiums are based on vehicle usage, post approval from the regulator.

Evaluate claims v/s No claim bonus: No claim bonus (NCB) is granted by the insurer for each claim-free year. The NCB discount starts from 20 per cent and goes up to a maximum of 50 per cent for five consecutive claim-free years. This makes for a considerable reduction in your premium. So, make sure you opt for NCB during claim-free years.

The other important point is that you should avoid raising a claim for a minor damage that will not cost you much because if you break your no-claim streak for small repairs, you will not be eligible for NCB in the following year.

For example, let’s assume you are eligible for an NCB discount of ₹5,000 next year and face a minor damage for which the cost of repair is ₹2,000. If you raise the claim for this, you will lose your right to claim the NCB of ₹5,000.

Opt for voluntary deductible: Almost all insurance policies have a compulsory deductible — that amount of the claim which the insured has to bear. Suppose the deductible in your policy is ₹1,000 and your assessed payable claim amount is ₹10,000, it means your insurer will pay you ₹9,000 and you have to pay ₹1,000. The compulsory deductible is fixed by the insurer and has no impact on the premium.

However, if you are willing to opt for a higher deductible and are ready to bear a higher amount during any loss, then this can help lower your premium.

Choose only third party cover for older vehicle: Your car insurance comprises two elements, third party (TP) cover and own damage cover which together make for a comprehensive cover. A TP cover is mandatory and covers you against third party liability, which may arise if a third party suffers a financial loss attributable to your vehicle.

However, TP does not protect your vehicle and a comprehensive cover is highly recommended. But, if your car is older than, say, 10 years, then you can consider taking a third party cover only.

Anti-theft device: Apart from enhancing the safety of your car, installing an anti-theft device (only that approved by the Automotive Research Association of India) also helps you get a discount on insurance premium.

Now that you are aware of these smart tips, explore them to save on your motor premium.

The writer is Head – Retail Underwriting, Bajaj Allianz General Insurance

 

This is a free article from the BusinessLine premium Portfolio segment.

 For more such content, please subscribe to The Hindu BusinessLine online.)

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3 mistakes to avoid when building your mutual fund portfolio

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The market rally since the March 2020 lows has brought in many new investors into the mutual fund (MF) fold. But are you investing right?

Here are three traps you should not fall into on the path to wealth creation through MFs.

Lacking goal-oriented approach

Latest available AMFI data (June 2021) show that retail investors contribute 54.82 per cent of the total AUMs of actively managed equity schemes — much higher than contributions to categories such as hybrid, gilt, debt or even index funds. However, only 55.6 per cent of the retail AUMs in equity funds were held for more than 24 months. This implies that while putting money in equity funds is a preferred route for retail investors, at least half of them are adopting a tactical, short-term approach rather than a strategic, long-term, goal-oriented approach to equity MF investing.

This assumption is also vindicated by a BL Portfolio survey on impact of Covid on personal finances done earlier this year as well as by the reader queries we get on their MF holdings.

A striking fact noticed among many survey respondents as well as among readers, who send in their portfolios for review, is their lack of delineation between long-term goal-based savings and other savings. Many invest in MF SIPs without any particular time frame or goal in mind. When they have any requirement — be it an emergency, a lifestyle need such as a new phone or laptop or a foreign holiday, they sell out or at least book partial profits. And the process goes on. Whatever remains from the additions and drawings over the years is their savings in equity MFs towards longer-term goals such as children’s education or retirement.

The ideal way to go about MF investing is to create a core portfolio for long-term goals and not touch this investment for other reasons. The core portfolio should consist of a combination of categories such as index funds, flexi-cap/multi-cap funds, mid and small cap funds in a proportion that suits one’s risk appetite.

For other needs on the way, tactical investing can be adopted. Informed investors can use sector or thematic funds — where timing the entry and exit assumes importance — as part of their satellite portfolio, for instance. Similarly, investors who follow the markets closely can do lump-sum investments during market lows and tactically move the gains out when a short-term goal comes closer.

While creating a separate fund portfolio for short- or medium-term goals, one must remember though that a horizon of less than 5-7 years pegs up the risk of investing in equity funds. Hence, monitoring the performance closely and booking profits is a must. Otherwise, one can also consider appropriate debt funds depending on the time to goal.

Stagnating SIPs

Another oft seen behavioural tendency among MF investors is the failure to increase their savings in tandem with their income. ₹10,000 a month in SIPs by a 30-year-old till he/she retires at 60 will grow to ₹3.52 crore assuming a reasonable 12-per cent CAGR. Stepping up the SIP by just five per cent annually can leave one richer by more than a crore. Stepping up by 10 per cent annually will take it to over ₹8 crore. Saving more as you earn more can make up for lower than expected portfolio returns. Returns can be lower for reasons such as sub-optimal fund choices and failure to review portfolio in time, lower alpha generation by certain categories of actively managed funds or by plain market volatility or bearishness in the years closer to your goal. Stepping up also helps in case you decide to retire early – a decision which cannot be foreseen when you have just started working or just begun saving.

Thirdly, to some extent, stepping up SIPs can also take care of your failure to account for inflation or misjudging it – the cost of your child’s professional education say, 20 years down the line, will not be the same as it is today. If it requires ₹10 lakh in today’s scenario, it will be at ₹26.5 lakh then, assuming a five per cent inflation.

Fund houses offer step-up/top-up or SIP booster facilities which will help increase your amounts annually. If you are confident of your fund choices, you can use this facility on one or more of your existing SIPs. Else, this annual exercise can be done manually, too.

‘When’ to exit

Consider this. A 10-year SIP in a leading large-cap fund ending on February 1, 2020, for instance, would have yielded 12.75 per cent CAGR, assuming you sold the investments to meet your goal when the tenure ended. The same SIP ending on April 1, 2020 would have decimated your returns to about 5-5.5 per cent, thanks to the March 2020 market crash. Equity investments are indeed subject to such market risks and hence, staying invested until the day of retirement or until the week your child’s higher education fee has to be paid, is not a good idea. A cardinal rule in goal-oriented equity MF investing is moving out the corpus a bit in advance when the going is good and when you have also got returns commensurate with the risk ( 12 per cent plus CAGR on your portfolio can be a goalpost). The corpus can then be reinvested in short-term fixed deposits to preserve the capital.

That said, ‘when’ to move out is not an easy decision. You need to avoid falling short of the corpus because of cautiously moving out to preserve the gains. You should also keep the taxation rules in mind — your corpus is what you get after paying long-term capital gains tax on gains over ₹1 lakh on equity funds; SIPs made in the last year before selling out are subject to short-term capital gains tax too. In this whole process, you can avoid pain by arriving at your corpus requirement scientifically, beginning to invest early, choosing the right funds, monitoring their performance regularly and by increasing your savings as and when your income goes up.

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How InvIT, REIT income is taxed

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Over the last few years, infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) have emerged as a popular investment option for those who want a regular income flow and are comfortable with taking on some risk.

The soaring equity market valuations and dwindling fixed income returns have only added to their appeal. With the government laying out a roadmap for monetisation of infrastructure assets, InvITs are expected to gain further ground.

An InvIT/ REIT pools money from investors (unitholders) to invest in a portfolio of income-generating infrastructure assets (80 per cent in operational assets) via subsidiaries (SPVs). REITs invest in real estate projects and InvITs in infrastructure assets, such as power transmission or road projects. The unitholders receive a regular payout, at least once every six months. Also, as units of publicly issued InvITs/REITs trade like shares on the exchanges, they offer an opportunity for capital appreciation.

Investors, however, need to wade through their complex taxation. The income of an InvIT/ REIT is passed on to unitholders in the form in which it’s received and is taxed as such.

Distributable surplus

An InvIT/ REIT receives cash flows from its project SPVs in the form of: a) dividends in return for the stake held b) interest and c) principal repayment on loans extended to them. Any other income at the InvIT/ REIT level such as capital gains from assets sold and not re-invested, and return on surplus cash invested, too, gets added to this.

Apart from this, if a REIT holds any real estate asset directly and not via an SPV, then the income flows to it in the form of rent (and not interest and dividend) and gets added as such.

All expenses incurred at the InvIT/ REIT level are deducted from the total cash inflow to arrive at the net distributable surplus (NDS). Unitholders must be paid at least 90 per cent of the NDS. A break-up of the components of the distribution is usually available on the websites/ presentations of the respective InvIT/ REIT.

Tax treatment

Distribution: The interest component of the NDS is taxed at your income tax slab rate. The dividend, too, is taxed at your slab rate if the project SPVs of the InvIT/ REIT have opted for the new concessional tax regime under section 115BAA of the IT Act. The dividend is tax-exempt if the project SPVs have not opted for the concessional tax.

Also as Hemal Mehta, Partner, Deloitte India, explains, before the interest and dividend are paid out, a 10 per cent withholding tax (for resident investors) is deducted by the InvIT/ REIT, against which the investor can claim credit.

The loan repayment component represents return of capital and is not subject to tax. Any other income at the InvIT/ REIT level such as capital gains on any asset sold or interest on fixed deposits which is passed on to the unitholders, too, is tax-exempt in their hands.

Powergrid InvIT, India Grid Trust and IRB InvIT Fund are the three publicly listed InvITs open to retail investors.

IRB InvIT Fund has distributed ₹41.30 per unit (₹30 as interest and ₹11.30 as return of capital) since its listing in May 2017 until March 31, 2021. Since most of the trust’s SPVs are loss-making (PAT level), there have been no dividends.

In case of India Grid Trust, almost all the distributions since its listing in June 2017 have been in the form of interest income. As of June 2021, India Grid Trust had opted for concessional tax for all except one of its SPVs. Any future distributions in the form of dividends will, therefore, be taxed accordingly.

Powergrid InvIT, which listed recently has not yet made any distributions. Four of the InvIT’s five project SPVs have opted for concessional tax.

In the REIT space, you have Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust, all publicly listed.

In the June 2021 quarter, they distributed ₹5.64, ₹4.60 and ₹6 per unit, respectively of which 80 per cent, 92 per cent and 24 per cent was tax-free in the hands of the investors.

Capital gains: If a unitholder sells his/her InvIT/ REIT units after holding them for up to 36 months, the short-term capital gains are taxed at 15 per cent (plus applicable surcharge and cess) without indexation benefit.

If the units are sold after being held for over 36 months, long-term capital gains (exceeding ₹1 lakh a year including from all equity investments) are taxed at 10 per cent (plus applicable surcharge and cess) without indexation benefit.

These rates are applicable to all REITs (which have to be mandatorily listed) and the listed InvITs.

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Top 5 Banks Offering Returns Up To 6.75% On 1 Year Fixed Deposits

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Investment

oi-Vipul Das

|

As fixed deposit investments have a variable tenure ranging from 7 days to 10 years, they can be used to meet a variety of personal financial goals, spanning short-term, mid-term, and long-term purposes. To ensure liquidity when it is needed, as well as renewing short-term fixed bank deposits once they mature. short-term fixed deposits are always the best option. The RBI, on the other hand, agreed not to alter the repo and reverse repo rates during its bi-monthly monetary policy review meeting on October 8, 2021. According to experts, the Reserve Bank of India (RBI) may hike repo rates in the near future if certain economic and financial conditions exist, such as high inflation, and it is recommended that you do not lock in your deposits for a long period of time at a lower rate, as this will expose you to interest rate risk.

In the current environment of low-interest rates on bank fixed deposits, it is preferable to initiate a fixed deposit investment for a short period of time, assume one year, and then wait for interest rates to rise in the future so that you can renew your deposits and reinvest for a longer period of time at higher rates. As a result, for investors looking to invest in one-year fixed deposits at higher rates, here are the top five banks, based on our own analysis, that are now offering returns of up to 6.75 percent with DICGC deposit insurance coverage of up to Rs 5 lakhs.

Jana Small Finance Bank

Jana Small Finance Bank

Jana Small Finance Bank, one of the small finance banks, is currently offering regular customers and senior citizens an interest rate of 6.25 percent and 6.75 percent on one-year deposits, respectively. On 07/05/2021, the bank officially modified its fixed deposit interest rates, which are as follows:

Period Regular FD Interest Rate (p.a.) Senior Citizen FD Interest Rate (p.a.)
7-14 days 2.50% 3.00%
15-60 days 3.00% 3.50%
61-90 days 3.75% 4.25%
91-180 days 4.50% 5.00%
181-364 days 5.50% 6.00%
1 Year[365 Days] 6.25% 6.75%
Source: Bank Website

Utkarsh Small Finance Bank

Utkarsh Small Finance Bank

This small finance bank is now promising an interest rate of 6.25% to the general public and 6.75% to senior citizens on their deposits maturing in 365 Days to 699 Days. For a deposit amount of less than Rs 2 Cr, the bank has last revised its interest rates on July 01, 2021 which is as follows.

Period Regular FD Interest Rate (p.a.) Senior Citizen FD Interest Rate (p.a.)
7 Days to 45 Days 3.00% 3.50%
46 Days to 90 Days 3.25% 3.75%
91 Days to 180 Days 4.00% 4.50%
181 Days to 364 Days 5.75% 6.25%
365 Days to 699 Days 6.25% 6.75%
Source: Bank Website

ESAF Small Finance Bank

ESAF Small Finance Bank

ESAF SFB is also offering an interest rate of 6.25% to non-senior citizens and 6.75% to senior citizens on their term deposits maturing in 365 days & 366 days. For a deposit amount of less than Rs.200 lakhs, the most recent interest rates on fixed deposits of the bank are listed below.

Period Normal Rate (%) Rate for Senior Citizens (%)
7 days to 14 days 4.00% 4.50%
15 days to 59 days 4.50% 5.00%
60 days to 90 days 5.25% 5.75%
91 days to 181 days 5.50% 6.00%
182 days 5.00% 5.50%
183 days to 363 days 6.00% 6.50%
364 days 5.25% 5.75%
365 days & 366 days 6.25% 6.75%
Source: Bank Website

RBL Bank

RBL Bank

RBL Bank is currently offering a 6.00 percent interest rate to the general public and 6.50 percent to senior citizens on deposits maturing in 12 months to less than 24 months. The bank’s most current interest rates on fixed deposits for domestic, NRO, NRE, and Flexi Fixed Deposits are provided below.

Period of Deposit Interest Rates p.a. Senior Citizen Interest Rates p.a.
7 days to 14 days 3.25% 3.75%
15 days to 45 days 3.75% 4.25%
46 days to 90 days 4.00% 4.50%
91 days to 180 days 4.50% 5.00%
181 days to 240 days 5.00% 5.50%
241 days to 364 days 5.25% 5.75%
12 months to less than 24 months 6.00% 6.50%
Source: Bank Website

IndusInd Bank

IndusInd Bank

IndusInd Bank is currently offering an interest rate of 6.00 percent to the general public and 6.50 percent to senior citizens on domestic/NRO/NRE/Senior Citizen Fixed Deposits maturing in 1 year to less than 1 year 6 months. The bank’s current fixed deposit rates for deposits less than Rs 2 crore are mentioned below.

Period Normal Rate (%) Rate for Senior Citizens (%)
7 days to 14 days 2.5 3
15 days to 30 days 2.75 3.25
31 days to 45 days 3 3.5
46 days to 60 days 3.25 3.75
61 days to 90 days 3.4 3.9
91 days to 120 days 3.75 4.25
121 days to 180 days 4.25 4.75
181 days to 210 days 4.6 5.1
211 days to 269 days 4.75 5.25
270 days to 354 days 5.5 6
355 days to 364 days 5.5 6
1 Year to below 1 Year 6 Months 6 6.5
Source: Bank Website

Story first published: Saturday, October 16, 2021, 17:20 [IST]



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HDFC Bank Q2 consolidated profit rises 18 pc to Rs 9,096 cr, BFSI News, ET BFSI

Banking & Finance

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HDFC Bank on Saturday reported an 18 per cent increase in its consolidated net profit at Rs 9,096 crore for the second quarter ended September 2021. The country’s biggest private sector lender had posted a consolidated net profit of Rs 7,703 crore in the corresponding quarter a year ago.

Total consolidated income during the quarter under review rose to Rs 41,436.36 crore from Rs 38,438.47 crore in July-September 2020, HDFC Bank said in a statement.

On a standalone basis, after providing Rs 3,048.3 crore for taxation, it earned a net profit of Rs 8,834.3 crore, an increase of 17.6 per cent over the quarter ended September 30, 2020.

The bank had earned a net profit Rs 7,513.1 crore on standalone basis in the same quarter a year ago, the statement said.

Total income (standalone) grew to Rs 38,754.16 crore in the second quarter of FY2022 from Rs 36,069.42 crore in the year-ago quarter. PTI DP MKJ MKJ



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Top 6 “AAA” Rated Corporate Deposits For Investment In 2021

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Mahindra & Mahindra Financial Services Limited

Crisil has given Mahindra Finance Fixed Deposits an FAAA rating, indicating a higher standard of deposit safety. This corporate deposit offers elderly people an extra 0.25 percent on Samruddhi Fixed Deposits and 0.35 percent to the company’s employees. Mahindra Finance is now offering the below-listed interest rates on deposits and the latest rates are applicable from 20th September 2021.

Samruddhi Cumulative Scheme (Up to Rs 1 Cr)

Period in months Interest p.a.(%)
12 5.50%
24 6.00%
36 6.30%
48 6.45%
60 6.45%

Samruddhi Non-Cumulative Scheme (Up to Rs 1 Cr)

Period in months Interest p.a. (Monthly) Interest p.a. Quarterly) Interest p.a. (Half yearly) Interest p.a. (Yearly)
12 4.95% 5.30% 5.40% 5.50%
24 5.45% 5.80% 5.90% 6.00%
36 5.75% 6.10% 6.20% 6.30%
48 5.90% 6.25% 6.35% 6.45%
60 5.90% 6.25% 6.35% 6.45%
Source: mahindrafinance.com

ICICI Home Finance Fixed Deposits

ICICI Home Finance Fixed Deposits

CRISIL has given ICICI HFC Fixed Deposits an FAAA/Stable rating, ICRA has given it an MAAA/Stable rating, while CARE has given it a AAA/Stable rating. Senior citizens can benefit from a 0.25 percent higher rate of interest on this corporate fixed deposit, which requires a minimum deposit of Rs 10,000. The following are the interest rates that are in force from August 23, 2021.

Tenure in months Cumulative Non-Cumulative
Monthly Income Plan Quarterly Income Plan Yearly Income Plan
>=12 to 5.25% 5.10% 5.15% 5.25%
>=24 to 5.65% 5.50% 5.55% 5.65%
>=36 to 5.75% 5.60% 5.65% 5.75%
>=60 to 6.45% 6.25% 6.30% 6.45%
>=72 to 6.65% 6.45% 6.50% 6.65%
Source: icicihfc.com

HDFC Green & Sustainable Deposits

HDFC Green & Sustainable Deposits

For the last 27 years, HDFC Ltd. has maintained AAA ratings from two major credit rating agencies (CRISIL and ICRA) for its deposit scheme. The deposit scheme of the corporate provides the following competitive interest rates for a deposit amount of up to Rs 2 Cr.

Special Deposits (Fixed Rates)

Period Monthly Income Plan Quarterly Option Half-Yearly Option Annual Income Plan Cumulative Option
33 Months 6.00% 6.05% 6.10% 6.20% 6.20%
66 Months 6.40% 6.45% 6.50% 6.60% 6.60%
99 Months 6.45% 6.50% 6.55% 6.65% 6.65%

Premium Deposits (Fixed Rates)

Period Monthly Income Plan Quarterly Option Half-Yearly Option Annual Income Plan Cumulative Option
15 Months 5.60% 5.65% 5.70% – 5.80%
22 Months 5.75% 5.80% 5.85% 5.95% 5.95%
30 Months 5.80% 5.85% 5.90% 6.00% 6.00%
44 Months 6.05% 6.10% 6.15% 6.25% 6.25%

Regular Deposits (Fixed & Variable Rates)

Period Monthly Income Plan Quarterly Option Half-Yearly Option Annual Income Plan Cumulative Option
12-23 Months 5.50% 5.55% 5.60% – 5.70%
24-35 Months 5.65% 5.70% 5.75% 5.85% 5.85%
36-59 Months 5.85% 5.90% 5.95% 6.05% 6.05%
60-83 Months 6.20% 6.25% 6.30% 6.40% 6.40%
84-120 Months 6.35% 6.40% 6.45% 6.55% 6.55%

Bajaj Finance Fixed Deposit

Bajaj Finance Fixed Deposit

On deposits maturing in 36 to 60 months, Bajaj Finance Fixed Deposit provides the maximum interest rate of up to 6.50 percent to the general public and up to 6.75 percent to senior persons. Bajaj Finance has achieved CRISIL’s FAAA/Stable and ICRA’s MAAA stable ratings, ensuring the safety of your deposit.

Tenors (Months) Regular Citizens Senior Citizens
12-23 5.51% to 5.65% 5.75% to 5.90%
24-35 5.94% to 6.10% 6.17% to 6.35%
36-60 6.31% to 6.50% 6.55% to 6.75%
With effect from 12th May 2021. Source: bajajfinserv.in

Sundaram Finance Fixed Deposits

Sundaram Finance Fixed Deposits

Sundaram Finance Fixed Deposits require a minimum deposit of Rs. 10,000/- per account and interest can be received through the RBI Electronic Clearing Service, NEFT, or cheques. Sundaram Finance deposits have been rated AAA for the past 30 years, indicating the safety of your capital. The below-listed interest rates are in force from August 08, 2021 for both regular and senior citizens.

Tenors (Months) Senior Citizen Others
Monthly Interest Rate %p.a(FD) Rate (% p.a at Quarterly rests for FD ) Monthly Interest Rate %p.a(FD) Rate (% p.a at Quarterly rests for FD )
12 5.97 6 5.48 5.5
24 6.12 6.15 5.62 5.65
36 6.27 6.3 5.77 5.8

LIC HFL Sanchay Deposit Scheme

LIC HFL Sanchay Deposit Scheme

CRISIL has given LIC Housing Finance Limited’s Sanchay Deposit Scheme an FAAA/Stable rating. The interest rates on public deposits up to Rs 20 crore are applicable from April 1, 2021, and are mentioned below. For deposits of Rs 20,000/- and above, but up to Rs 20 Crores on all tenors, senior persons would be entitled to an additional 0.25 percent p.a. interest rate.

TERM INTEREST RATE P.A. FOR MONTHLY OPTION INTEREST RATE P.A. FOR YEARLY OPTION
Non-Cumulative Deposits Cumulative & Non-Cumulative Deposits
1 YEAR 5.10% 5.25%
18 MONTHS 5.35% 5.50%
2 YEARS 5.50% 5.65%
3 YEARS 5.60% 5.75%
5 YEARS 5.60% 5.75%



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What Is SBI Recurring Deposit (RD) Scheme: Its Interest Rates And Benefits

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Interest rates under the SBI Recurring Deposit (RD) Scheme

The rate of interest under an RD scheme is the same as applicable to Term Deposits for Public and Senior Citizens.

Deposit tenure Interest Rates (PA) for Public Interest Rates (PA) for Senior Citizens
1 year to less than 2 years 5.00% 5.50%
2 years to less than 3 years 5.10% 5.60%
3 years to less than 5 years 5.30% 5.80%
5 years to 10 years 5.40% 6.20%

A Recurring Deposit (RD) is certainly qualitatively different from FDs, concerning an RD’s flexibility. Under any FD scheme, you are needed to deposit the money in the post office or a bank, one time in a lump sum. But under an RD scheme in any bank, you can invest a fixed amount monthly to earn good interest on the amount.

Deposit tenure and deposit amount

Deposit tenure and deposit amount

In SBI, you can choose your deposit tenure or the period of deposit from a minimum of 12 months, to a maximum of 120 months. The minimum deposit amount under the Recurring Deposit (RD) is Rs. 100 per month which will be multiplied in Rs. 10, for further investments further. However, there is no upper limit or fixed maximum deposit amount for the scheme. After the maturity of your RD scheme, you will be paid a lumpsum amount – that is the regular investments along with the interest earned. Hence, an RD is a good systematic saving-cum-investment instrument for the citizens. With the regular deposit opportunity and good interest rates, RDs will provide you flexibility and ease of investments.

Penalty

Penalty

If you fail to deposit the monthly installment under the scheme, the SBI will charge a penalty on your investment. For accounts with a maturity period of 5 years and less, your penalty will be Rs. 1.50 per Rs. 100 per month. For accounts with a maturity period above 5 years, your penalty will be Rs. 2.00 per Rs. 100 per month. SBI levies an ‘AA service charge’ of Rs. 10 on the Recurring Deposit (RD) accounts paid out on or after the date of maturity, wherein there is the default in payment of 3 or more consecutive installments and the account has not been regularized. Your account will be closed permanently if you do not pay the monthly installment for 6 consecutive periods. In that case, your balance will be paid to you.



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SBI Extends SBI Wecare Senior Citizens FD Scheme: Check Interest Rates

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Personal Finance

oi-Kuntala Sarkar

|

State Bank of India (SBI), the largest public sector bank in the country has introduced a special fixed deposit scheme for senior citizens in May, last year during the pandemic, called ‘SBI Wecare Senior Citizens Scheme’. It is a term deposit scheme aiming to provide a promising investment opportunity for Indian senior citizens with good interest rates. Now the bank has extended the offer till March, next year. Now, SBI has extended the duration of this scheme for the 5th time in a row, to benefit the senior citizens during this tough time. This scheme offers additional interest rates under the scheme than other FD.

SBI Extends SBI Wecare Senior Citizens FD Scheme: Check Interest Rates

SBI has officially informed, “A special SBI Wecare Deposit for Senior Citizens introduced in the Retail TD segment wherein an additional interest of 30 bps (over and above the existing 50 bps) will be paid to Senior Citizen’s on their retail TD for ‘5 Years and above’ tenor only. “SBI Wecare” deposit scheme stands extended till March 31, 2022.” More interest in the term deposit scheme will certainly benefit the senior citizens who have subscribed to the scheme, or those who will opt for it. The additional interest is available both for renewal schemes and new subscribers.

Interest rate

The public sector bank will offer 30 bps more interest on the SBI Wecare Senior Citizens FD Scheme, as mentioned on their website. The additional interest will be given to the subscribers who have taken up the scheme for the tenor of 5 years or above. SBI provides a 5.40% interest rate on 5 years FD for common citizens, but the bank gives 6.20% interest under the special FD scheme for the senior citizens. Hence, that means under the SBI Wecare Senior Citizens FD Scheme, a senior citizen can earn 0.80% extra interest for 5 years, or more tenure. The interest rate for the SBI Wecare scheme for 1 year to less than 2 years is 5.50%, for 2 years to less than 3 years is 5.60%, for 3 years to less than 5 years is 5.80%, and for 5 years and up to 10 years, it is 6.20%. So, for 5 years or more, the scheme provides the highest interest rate. a senior citizen can earn interest with these rates on retail term deposits of less than Rs. 2 crores.

However, a senior citizen can also subscribe to the Senior Citizens Savings Scheme Account (SCSS), for a lucrative interest rate. The tenure of the SCSS is also 5 years.

Story first published: Saturday, October 16, 2021, 13:42 [IST]



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Bank of Baroda launches centralised agri-loans processing units

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Bank of Baroda (BoB) on Saturday launched centralised agri-loans processing units across 16 Zonal Offices.

Christened as the Centre for Agriculture Marketing and Processing (CAMP), the unit is a dedicated credit delivery model with a focus on financing non-traditional agricultural products and handling agri-marketing activities, the public sector bank said in a statement.

CAMP consists of trained manpower with an understanding of and exposure to high value credit accounts, it added.

The bank said it will also promote collaboration with local organisations for sourcing quality business.

Changing landscape

Sanjiv Chadha, MD & CEO, Bank of Baroda, said that the agriculture sector has been one of the very few sectors which has not only been resilient in the face of the ongoing pandemic but has also been growing. Further, a large number of agritech firms are changing the entire agri-ecosystem and landscape.

“This is resulting in newer opportunities for growth at a much reduced cost…As the country celebrates ‘Azadi ka Amrit Mahotsav’ (75 years of Independence), we are committed to invest in the sustainable growth of the agri and allied industries,” Chadha said.

Also see: ₹28,655-crore Centre’s subsidy on fertilisers for rabi season to benefit farmers, industry

Vikramaditya Singh Khichi, Executive Director, Bank of Baroda, said that in the changing market scenario, CAMP will promote adoption of new and innovative agriculture products and practices, resulting in the bank having a diversified agriculture advances portfolio.

Meanwhile, BoB on Saturday launched the 4th edition of ‘Baroda Kisan Pakhwada’, a fortnight long farmer engagement programme.

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