Private sector lender Yes Bank on Tuesday announced the launch of floating-rate fixed deposit (FD) for domestic customers. In this, the interest rate will keep fluctuating based on the changes in repo rate, allowing the customers of the bank to enjoy dynamic returns on their fixed deposits.
“This floating rate FD can be availed for a tenure of one year to less than three years, as per the customer’s preference,” the lender said in a statement, adding that the bank has also raised its interest rates on standard fixed deposit up to 6.5 per cent per annum for regular customers and up to an enhanced rate of 7.25 per cent per annum for senior citizens.
Prashant Kumar, MD & CEO of Yes Bank, said, “At Yes Bank, we are committed to innovation and customer-centricity as the core of our banking initiatives. We consistently strive to provide the best-in-class benefits and experience to our customers across segments. Floating-rate fixed deposit is a one-of-a-kind FD product which is yet another testament to such continuous endeavours.”
Kumar added that one of the main advantages of this product is that the revision on the interest rate will happen automatically and will not require any manual intervention by the Bank or the customers. “There has been careful deliberation and thought behind the launch of this floating rate FD, and it is another step towards further enhancing our retail product offering.”
As the Reserve Bank of India is in the tight monetary policy mode and increasing its key repo rates to control inflation, commercial banks are also following the suit and raising their interest rates. Several banks have increased their interest rates, including ICICI Bank, HDFC Bank and Punjab National Bank, in the past days.
ICICI Bank has an interest rate range of 2.75-6.50 per cent on fixed deposits, depending upon the tenure and age of the depositors. HDFC Bank is also offering the same interest rates in its term deposits. However, Punjab National Bank is giving returns in the range of 3-6 per cent.
The RBI’s Monetary Policy Committee last week unanimously decided to raise the repo rate by 50 basis points to 4.90 per cent with the focus on withdrawal of accommodation. It has prompted the lenders to hike interest rates on loans.
Retail inflation slightly eased to 7.04 per cent in May, according to the data released by the ministry of statistics and programme implementation (MoSPI) on Monday. India’s headline inflation touched near-eight-year high of 7.79 per cent in April. A sharp drop in the fuel prices after the reduction in excise duty had significantly contributed to bring down the food prices last month, believed experts. The Consumer Price Index (CPI) inflation in May remained above the upper tolerance limit of Reserve Bank of India (RBI), for the fifth consecutive month.
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