Drastic drop in FD rates, a blow to senior citizens

The government has been maintaining the payment of 15% interest for fixed deposits (FD) of senior citizens for some time. This was a great relief to officials of the government, corporations, various boards and universities who received EPF lump sum retirement benefits without a monthly government pension.

Not so long ago in 2021/2022, the bank rates went up to around 20–24 % per month. Due to this reason, the 15% interest rate scheme for seniors was scrapped by the banks. Currently seniors receive a paltry 7-8% interest for FDS.

University officials, lecturers and staff receive a lump sum payment of EPF on retirement (no monthly pension). This 15% special FD scheme supported them to live happily using the income for medicines and living expenses. It must be pointed out that this group does not have any other source of income than bank interest.

This was the situation at the time when there was no severe poverty in the country. But now the situation is bad – the cost of living has gone up by leaps and bounds and living itself has become a struggle for this group of people who served the country diligently. For some retirees it has become a nightmare as they receive no financial support from children but instead have to put in some financial assistance for children as well from the current paltry interest.

This sudden reduction of interest rates to 7-8% has hit them below the belt. They are in dire straits due to the current inflation and high cost of medicines etc. and it is a daily challenge and a stress for them to lead a peaceful retirement.

Another point is that the 15% interest was limited to a maximum FD of 15 lakhs. This is not sufficient now. I suggest that this maximum amount be increased to at least 30 lakhs.

We request the government to consider our plight and reintroduce the 15% scheme at least up to 30 lakhs, so that we can live with dignity and self-respect. This is an urgent need to improve the living conditions of retirees who solely depend on interest income.

JAYALATH MUTTEWEGEDERA PRESIDENT UNIVERSITY EXECUTIVE RETIREES ASSN.