Up to 7.30% interest rate: SBI, Bank of Baroda, Indian Overseas Bank offer special FD plans with higher deposit rates – Times of India

Banks offer special FD rates to attract deposits: In an effort to attract retail deposits, banks have launched special schemes offering savers an additional 25-30 basis points for term deposits above current commitments for similar tenures. This move suggests that policy interest rates are likely to remain high in the near future.
According to an ET report, several major banks, including SBI, Bank of Baroda, Indian Overseas Bank, Union Bank of India, and Bank of Maharashtra, have introduced deposit plans with interest rates ranging from 7.25% to 7.30% for investments spanning 399 to 444 days.Senior citizens are eligible for an extra 50 basis points on these rates.
For example, SBI’s Amrit Vrishti scheme provides an interest rate of 7.25% for deposits with a tenure of 444 days. Similarly, Bank of Baroda’s Monsoon Dhamaka plan offers the same rate of 7.25% for deposits spanning 399 days.

Indian Overseas Bank has set its interest rate at 7.30% for deposits lasting 444 days. Bank of Maharashtra, on the other hand, is offering 6.90% for deposits with a duration of 200 days and 7.10% for those extending to 400 days.
Lenders are struggling to raise retail deposits and have therefore introduced limited-period schemes, according to a treasury head from a commercial bank. Bankers believe that if credit growth continues at 14-16%, they will need to offer more attractive interest rates to mobilize deposits.
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The decision to increase deposit rates follows a recent interaction between the Reserve Bank of India (RBI) and bank CEOs, where the regulator instructed banks to close the gap between deposit and credit growth. As of June 28, bank credit had risen by 14% year-on-year, while deposits had only increased by 11%.
Industry experts believe that banks are offering these peak rates on shorter tenures because they anticipate the rate cycle, which was previously expected to shift in the latter half of this calendar year, will eventually start to reverse as inflation remains consistently within the central bank’s legally mandated limits.
Anil Gupta, senior vice president of the financial sector at ICRA Ratings, said, “Banks are offering higher rates for less than two years tenure. So when the interest rate cycle turns, banks would not want to be stuck with high-cost liabilities.”
However, RBI governor Shaktikanta Das recently indicated that rates would remain elevated for some time, saying, “The overall economic environment globally and in India is so uncertain… I think it is too early to talk about an interest rate cut.”