 "bank of india, BOI")
Bank of India has reduced interest rates on short-term and medium-term fixed deposits for select tenors with effect from April 15. It also withdrew the special fixed deposit scheme for 400 days where the interest rate was at maximum of 7.3 per cent.
The decision came on Saturday (April 12) after the Reserve Bank of India cut the policy repo rate by another 25 bps to 6 per cent on Wednesday.
Interest rate on fixed deposits less than Rs 3 crore, maturing between 91 days and 179 days, will be 4.25 per cent against 4.50 percent earlier and 5.75 per cent, reduced by 25 basis points (Bps), for 180 days to less than 1 year.
At the same time, a fixed deposit rate for one year would still fetch a higher interest rate of 7.05 per cent against the earlier rate of 6.80 percent. Deposits above 1 year and up to 2 years would get 6.75 per cent, reduced by 5 bps.
Meanwhile, fixed deposits of Rs 3 crore and above to less than Rs 10 crore with a maturity between 91 days and 179 days will fetch an interest rate of 5.75 per cent, currently which is at six percent. Deposits with a maturity of 180 days and up to 210 days will have an interest rate of 6.25 per cent against 6.5 per cent earlier and 6.50 percent against 6.75 per cent for deposits of 211 days to less than a year.
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The interest rate on one-year fixed deposits has been reduced to 7.05 per cent as compared to 7.25 per cent, while those above 1 year to less than 2 years would get 6.70 per cent against 6.75 per cent.
Previously, the country's largest lender State Bank of India (SBI) withdrew a special fixed deposit scheme – Amrit Kalash – which offered 7.10 per cent interest rate for 400 days, with effect from April 1. SBI started this special deposit scheme in April 2023.
Other banks including HDFC Bank and Yes Bank have also trimmed interest rates on fixed deposits on select tenures. While HDFC Bank – country’s largest private sector lender – reduced deposit rates by 35 basis points on fixed deposits with a tenure of 2 years and 11 months (35 months) and by 40 basis points on fixed deposits with a tenure of 4 years and 7 months (55 months), Yes Bank lowered FD rates on select tenures by 25 bps.
Banks, so far, have been reluctant to cut deposit rates, given the tightness in deposit mobilization. Meanwhile, some banks are continuing with their special fixed deposit schemes which typically offer higher interest rates than other fixed deposits for a specified tenure. Indian Bank extended two special fixed deposit schemes, offering 7.05 per cent for 300 days and 7.30 per cent for 400 days, till April 30.
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