The Hindu Business Line : IDBI relaunches 500-day FD scheme

Industrial Development Bank of India (IDBI) has relaunched its 500-day fixed deposit scheme under the IDBI Suvidha Plus Fixed Deposit (ISPFD) at a higher rate of interest of 9.5 per cent per annum. The initial rate of interest was at 8.25 per cent. It has also increased the rate of interest on its existing 360-day ISPFD scheme and the five-year IDBI Suvidha Tax Savings FD (ISTFD) by 50 basis points to 9.5 per cent per annum, all effective May 7, said a bank release. Senior citizens will enjoy a 50-basis points higher interest rate on the three ISPFD schemes and the ISTFD scheme.Eligible customers such as individuals, Hindu Undivided Family (HUF), companies, trusts and NGOs will be able to park a minimum of Rs 10,000 (and in multiples of Rs 1,000 thereafter) in the ISPFD scheme. There will be no cap on the quantum of funds to be parked under the scheme, the release added. Under ISTFD scheme, an individual or a HUF will be eligible to invest up to a maximum amount of Rs 1 lakh per annum and avail benefits under Section 80C of the Income Tax Act. The investment in ISTFD along with investments in other saving schemes will be subject to an overall ceiling of Rs 1 lakh for the purpose of tax benefit. The interest on ISTFD will be liable for tax, either on accrual or on receipt basis, depending on the method of accounting followed by the depositor, said the release.

Depositors in the ISPFD scheme will also have the choice of receiving interest payouts either on a monthly or a quarterly basis, while premature withdrawal will attract a penalty of 1 per cent, the release added. Depositors in the ISTFD scheme will have the choice of receiving interest payouts on cumulative basis, besides receiving it on a monthly/quarterly basis.

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