After the recent increases in deposit rates by leading banks such as ICICI and HDFC Bank, the Indian Overseas Bank has also increased the deposit rates by 50 basis points.
IOB executive director YL Maran said, “We have decided to raise the deposit rates considering the current market conditions. We expect the rate to firm up in the near future”.
The interest rate for fixed deposits of 5 years has gone up by 50 bps to 7.25 %. For deposits less than 5 years, the interest rate has gone up by 25-50 bps. The altered rates for deposits with tenure of 9-12 months will be 6% and for those with a tenure of one to below 5 years, the rate will be 6.75%. For deposits of Rs. 1 crore and more, the new rate will be 6.5% from current 6%.
But when asked about lending rates, Maran said, “There is no plan to increase the lending rates at the moment.” It means currently there won’t be any increase in the interest rate on home loans.
Previously, HDFC Bank had hiked deposit rates to the tune of 50 -100 basis points. It was followed by ICICI bank which had increased its deposit rates by 50 bps on certain deposits. However, the entire process was started by IDBI Bank.