Senior citizen bonus for their FD’s
2010-01-05
The ‘Senior Citizens’ Interest Bonus’ (Bonus) is effective from January 1st 2010 and the CB will reimburse the amount of extra bonus of 20% paid by the state and commercial banks and Registered Financial companies, Deputy Governor D.S.Wijesingha said.
The Bonus would be applied to normal savings accounts and fixed deposits (of senior citizens) accounts of all commercial banks. However, the maximum amount of Bonus payable was restricted to Rs. 90,000, he said.
The new Bonus scheme is the result of a directive from President Mahinda Rajapaksa as Finance Minister. He has instructed the CB to come up with a new product that would benefit senior citizens while motivating them to save.
President Rajapaksa was also mindful of requests by government pensioners to increase their pensions. But he will be able to do it only as a budget proposal. The new facility will be an interim relief for senior citizens.
In a media release the Central bank said: “It has also considered the need for enabling finance companies to pay a special rate of interest to the deposits made by senior citizens as a means of retaining such funds for long term financing purposes while relieving the impact of the declining interest rates on the earnings of senior citizens, who have deposited their pension benefits and other long term savings with RFCs as a means of earning.
The release said: “According to the revised Direction issued by the Monetary Board with effect from 1st January 2010, RFCs may pay additional 4 percent over the weighted average yield on 364 -day Treasury Bills issued during the immediately preceding quarter, in respect of short term deposits having maturity of 12 months or less. For deposits over 12 months, RFC may pay additional 5 percent over the weighted average yield on 364 -day Treasury Bills issued during the immediately preceding quarter. In respect of savings deposits, RFCs may pay interest not exceeding the weighted average yield on 91-day Treasury Bills.
In the case where a time deposit or a savings deposit maintained by a person who is over sixty (60) years of age (senior citizen) at the time of making or renewing such deposit after 01 January 2010, a finance company may pay an additional interest of one percentage point over the above-mentioned limits.
The Bonus would be applied to normal savings accounts and fixed deposits (of senior citizens) accounts of all commercial banks. However, the maximum amount of Bonus payable was restricted to Rs. 90,000, he said.
The new Bonus scheme is the result of a directive from President Mahinda Rajapaksa as Finance Minister. He has instructed the CB to come up with a new product that would benefit senior citizens while motivating them to save.
President Rajapaksa was also mindful of requests by government pensioners to increase their pensions. But he will be able to do it only as a budget proposal. The new facility will be an interim relief for senior citizens.
In a media release the Central bank said: “It has also considered the need for enabling finance companies to pay a special rate of interest to the deposits made by senior citizens as a means of retaining such funds for long term financing purposes while relieving the impact of the declining interest rates on the earnings of senior citizens, who have deposited their pension benefits and other long term savings with RFCs as a means of earning.
The release said: “According to the revised Direction issued by the Monetary Board with effect from 1st January 2010, RFCs may pay additional 4 percent over the weighted average yield on 364 -day Treasury Bills issued during the immediately preceding quarter, in respect of short term deposits having maturity of 12 months or less. For deposits over 12 months, RFC may pay additional 5 percent over the weighted average yield on 364 -day Treasury Bills issued during the immediately preceding quarter. In respect of savings deposits, RFCs may pay interest not exceeding the weighted average yield on 91-day Treasury Bills.
In the case where a time deposit or a savings deposit maintained by a person who is over sixty (60) years of age (senior citizen) at the time of making or renewing such deposit after 01 January 2010, a finance company may pay an additional interest of one percentage point over the above-mentioned limits.
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