Senior Citizens 8% Fixed Interest Rate Yojana Scheme by Modi
As the New Year Eve injects happiness into the hearts of millions all over India, PM Narendra Modi comes up with another historic address to the nation. In some of the crucial announcements he has made in the currently ongoing speech, citizens of India are left with some overwhelming gifts he is giving to the nation.
Ignoring the widespread disagreement of the opposition and some comments from the Congress Youth Leader – Rahul Gandhi, the Modi Government is making history that no one of sane mind can deny.
8% Fixed Interest
One such historic announcement is the declaration of 8% fixed interest rate to senior citizens for any fixed deposit they make to the tune of 7.5 lakhs and below. That’s a sigh of relief for many because of the rapidly decelerating rates post demonetization.
However, there is a clause that one needs to adhere to. The deposit should be made for a period of 10 years. While that’s a bit rude from the standpoint of ‘lock in period’, Prime Minister Narendra Modi attached an interesting reward for those who comply.
Unlike the usual rule of interest payout at the end of the term of fixed deposits, senior citizens can now withdraw the interest they earn on fixed deposits they make on a monthly basis.
In short, fixed deposits made after this announcement will effectively convert into monthly income generating scheme.
How much can you earn per month?
Assuming that you deposit the maximum allowed for this scheme, interest you will be earning is:
Interest income per month = (8% of 7.5 lakhs)/12 = (INR 60,000)/12 = INR 5,000
So, with a deposit of 7.5 lakh rupees for 10 years, you will earn INR 600,000 in 10 years, which can be withdrawn on a monthly basis at the rate of INR 5,000 per month.
How is it going to help?
That’s an interesting question. A monthly income is always helpful to meet the regular or daily needs or demands. Previously, once the money was put into fixed deposits, the only way of getting back the money (including the interest earned) was at the end of the term of the fixed deposit. This means, the money was literally sealed off for a fixed time period and could not be used for any purpose. This will no longer happen as the money invested will give a monthly income stream.