Amid fierce competition to raise more deposits, Indian banks have started offering higher returns on fixed deposits (FDs). Leading banks such as the State Bank of India (SBI) and HDFC were the pioneers in raising interest rates on FDs, prompting smaller banks like IDBI to follow suit to avoid being left behind.
SBI has introduced a new category for super senior citizens—individuals above 80 years—offering them an additional 10 basis points over the rates for senior citizens. This scheme has also been adopted by IDBI Bank.
IDBI Bank has launched the ‘IDBI Chiranjeevi-Super Senior Citizen FD’, a fixed deposit product exclusively for individuals aged 80 years and above. This scheme offers an additional 0.65 percent interest above the standard FD rates. The interest rates under this scheme include 8.05 percent for a 555-day tenure, 7.9 percent for 375 days, 8 percent for 444 days, and 7.85 percent for 700 days. The scheme became effective on January 13, 2025.
As part of its innovative savings schemes, SBI has also introduced the ‘Har Ghar Lakhpati’ (Lakhpati in Every Home) recurring deposit scheme. The objective is to help individuals accumulate a corpus of Rs one lakh or more through small monthly savings over three to ten years. Individuals, including minors aged 10 and above, are eligible to open an account.
For those under age 60, the scheme offers interest rates of 6.75 percent for tenures of three and four years, and 6.50 percent for tenures of five to 10 years. For those above 60, it offers 7.25 percent for three and four years, and 7 percent for tenures of five to 10 years.
Similarly, the Bank of Baroda has introduced liquid fixed deposits, allowing customers to withdraw in units of Rs 1,000 after an initial deposit of Rs 5,000. Subsequent deposits must also be in multiples of Rs 1,000.
Finance Minister Nirmala Sitharaman, during a recent review meeting, urged the chiefs of public sector banks to accelerate the growth rate of their deposits to match the quicker pace of credit growth. At the time, the growth rate of deposits was 3 to 4 percent slower than the pace of credit growth, posing a risk of asset-liability mismatch in the banking system.
The concerted efforts by these banks to offer attractive FD rates and innovative savings schemes reflect their strategic moves to strengthen their deposit bases and ensure sustainable growth amidst a competitive financial landscape.
