To mobilise deposits, banks revise rates

In order to mobilise deposits, banks have started revising their interest rates. They are introducing special innovative deposit solutions that blend assured and competitive returns, in addition to introducing special tenures and schemes for senior citizens.

For example, Bank of Baroda has introduced a unique alternative to the traditional fixed deposits — the BoB Liquid Fixed Deposits, which combine the benefits of earning higher returns from FDs with the convenience of easy liquidity associated with a savings account. It gives depositors the flexibility of a partial withdrawal facility without having to close the entire FD, which ensures that depositors can address their urgent financial needs as and when required, while the balance funds continue to earn interest at the contracted rate in the same FD. The deposit tenure ranges from 12 to 60 months, with interest rates based on prevailing rates. For instance, senior citizens receive an extra 0.5 per cent for deposits up to three years and 0.6 per cent for deposits over three years and up to five years. Super senior citizens enjoy an additional 0.1 per cent benefit on deposits beyond one year.

Earlier, Federal Bank made changes to its fixed deposit interest rates. It is now offering rates as high as 8 per cent for senior citizens for a tenure of 444 days and deposits of less than Rs 3 crore. For general citizens, the interest rates now range from 3 per cent to 7.5 per cent, while senior citizens can enjoy rates between 3.5 per cent and 8 per cent.

IDBI Bank has also introduced a new specialised fixed deposit scheme, ‘IDBI Chiranjeevi-Super Senior Citizen FD’, targeting customers aged 80 years and above. The premium offering provides enhanced interest rates. The 555-day tenure under this scheme offers an interest rate of 8.05 per cent per annum, making it one of the most competitive options in the market for super senior citizens. The bank has also introduced appealing rates for other tenure options, including 7.9 per cent per annum for 375 days, 8 per cent per annum for 444 days, and 7.85 per cent per annum for 700 days.