Public sector banks, led by State Bank of India (SBI) and Bank of Baroda (BoB), are now offering attractive interest rates on short-term fixed deposits. These offers range from 360 to 666 days, with interest rates from 7.05% to 7.3%. This move comes as banks scramble to attract deposits to keep up with the growing demand for credit.
Why Banks Are Raising Interest Rates
During the pandemic, many depositors shifted their money from bank accounts to equities and mutual funds, which offered better returns. Initially, banks didn’t feel the impact due to low credit demand. However, in the past 18 months, credit demand has surged to around 16%, while deposit growth has lagged at 10-12%. This imbalance has raised concerns about asset-liability mismatches, prompting the Reserve Bank of India to urge banks to address this issue.
Special Fixed Deposit Schemes
To attract more deposits, leading banks have launched special fixed deposit schemes with higher interest rates. Here are some notable offers:
- Bank of Baroda (BoB): Under its Monsoon Deposit Scheme, BoB is offering 7.25% interest for 399 days and 7.15% for 333 days. Senior citizens can earn an additional 0.50%, bringing their rates to 7.75% for 399 days and 7.65% for 333 days.
- State Bank of India (SBI): SBI’s new term deposit scheme offers 7.25% interest for 444 days and 7.1% for 400 days. Senior citizens receive an extra 0.50%, making the rate 7.75% for 444 days. This scheme is available until March 31, 2025.
Comparing Interest Rates
Other banks are also offering competitive interest rates for short-term deposits:
- Bank of India: 7.3% for 666 days.
- Indian Overseas Bank: 7.3% for 666 days and 444 days.
- Bank of Maharashtra: 7.25% for 666 days and 7.1% for 400 days.
- Canara Bank: 7.25% for 444 days.
- Central Bank of India: 7.3% for 555 days and 7.25% for 444 days.
- Indian Bank: 7.25% for 400 days and 7.05% for 300 days.
- Punjab National Bank: 7.25% for 400 and 444 days.
- Punjab & Sindh Bank: 7.25% for 444 days and 7.15% for 333 days.
- Uco Bank: 7.05% for 400 days.
- Union Bank of India: 7.25% for 399 days.
- Ideal for Risk-Averse Investors
These limited-period fixed deposit schemes are perfect for risk-averse investors seeking assured returns over a relatively short term. Typically, any fixed deposit offering above 7% is considered attractive, making these schemes worth considering for those looking for safe investment options.
Disclaimer: OpEd Moped does not claim responsibility for this information. If you have specific financial concerns, consulting a professional is best.
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