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Our Bureau

Banks introduce new tenor products to lure deposits

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Mumbai Jan. 24 Banks are into a competitive spree for deposits by lifting interest rates to support robust credit demand.

Taking out the current inflation rate of 6.12 per cent, a depositor under most schemes will probably earn a net interest of slightly less than 3 per cent.

The latest to join the scramble is ICICI Bank, which has marked up interest rates on fixed deposits across tenors and amount buckets in the range of 0.25 per cent-1.50 per cent, effective January 20.

The bank's 890-day fixed deposit will earn 9 per cent (7.50 per cent and 8 per cent for bulk deposits) per annum.

Last week, State Bank of India introduced a new term deposit product, SBI's Platinum Account, bearing an interest tag of 9 per cent per annum compounded quarterly, effective January 22. The deposit is for a maximum period of three years.

For deposits less than Rs 15 lakh and for that of Rs 15 lakh but less than 50 lakh with a maturity of 390 days, interest rates will be at 8.25 per cent and 8.50 per cent respectively, said an ICICI Bank press release. For deposits of Rs 50 lakh and above but less than Rs 1 crore for a maturity of 890 days will attract an interest rate of 9 per cent (8 per cent).

"In ICICI Bank, customers can choose the cumulative fixed deposit scheme, which reinvests the earned interest quarterly and thus generates excellent returns. For instance, in the 890-day fixed deposit, ICICI Bank customers will earn a yield as high as 9.94 per cent," said Mr Maninder Singh Juneja, Head-Retail Liabilities, ICICI Bank.

Union Bank of India has also introduced a new bucket of 366 days with an interest rate of 8.30 per cent, effective January 23.

IDBI Ltd has launched a new 600-days "Suvidha Plus" fixed deposit, bearing an interest rate of 8.75 per cent per annum.

"The new deposit scheme opens for subscription on January 25 and offers an extra 50 basis points interest over its earlier version (500-day tenor FD scheme)," said a press release by the bank. Senior citizens will earn 9.25 per cent per annum on this deposit scheme.

Related Stories:
SBI launches Platinum Account; hikes deposit rates
Banks' deposit mobilisation catches up with credit offtake

More Stories on : Interest Rates | Fixed Deposits | Private Banks | ICICI Bank Ltd

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