Indian Overseas Bank Fixed Deposit Rate
Indian Overseas Bank Fixed Deposit Rate - FD Rate in India
The first choice for any conservative investor in India is a Fixed Deposit (FD) account. A fixed deposit account is a traditional form of savings which has a higher rate of interest than a regular savings account. It is considered a safe and reliable form of investment option as it promises a guaranteed return and is free from volatility / market risks. If you have some idle money, opening an FD account is the simplest way to earn a fixed interest income.
FD is a popular mode for investment with the general population in India, as it offers a guaranteed return as opposed to other forms of investment that are considered riskier, for example, the stock market. While opening an FD, you can choose how much you want to deposit and for what time period you want to deposit the amount. Fixed deposits tenures usually range from seven days to ten years. The banks are free to set their own interest rates, which is generally influenced by the repo rate of the RBI. The rate of interest also depends on the deposit amount, and the tenure amongst other factors. In India, the interest rate generally ranges from 4% to 8% per annum.
Opening an FD account comes with a catch: once you deposit the amount, you cannot withdraw from it, like you would do in a savings account. You can break the FD (make a premature withdrawal), but only up on payment of a penalty. Breaking an FD might also affect the interest payout.
Once the deposit matures, the bank credits the principal amount along with the interest earned to the bank account specified on the application form when the FD is opened. The documentation process is hassle-free and simple, making it easy even for a first-time investor.
Apart from banks, NBFCs and corporates too offer fixed deposits.
Indian Overseas Bank Deposit Rates
As mentioned before, the rate of interest paid on a fixed deposit varies according to the amount deposited, period and the issuing bank. The general rule of thumb is, the longer the term of deposit, the higher the rate of interest. But a bank may also offer a lower rate of interest for a longer tenure if the rates are expected to fall in the future. Indian Overseas Bank Interest Rates typically range from 3% - 8% per annum.
Indian Overseas Bank FD rates
Following is an overview of Indian Overseas Bank Term Deposit Rates and Indian Overseas Bank Short-Term Fixed Deposit Interest Rates.
Indian Overseas Bank Interest Rates on Fixed Deposits 2015 – 2016:
(Do keep in mind that these rates can change at any time and can be changed at the sole discretion of the Bank. For the latest rates, it is advisable to check with Indian Overseas Bank directly.)
Domestic Term Deposit Interest Rates for up to Rs. 1 Crore:
|7 days - 14 days||4.00|
|15 days - 29 days||4.00|
|30 days - 45 days||4.00|
|46 days - 60 days||4.00|
|61 days - 90 days||4.50|
|91 days - 120 days||5.00|
|121 days - 179 days||5.00|
|180 days - 269 days||5.75|
|270 days - < 1 year||6.25|
|1 year - < 2 years||7.25|
|2 years to 3 years||7.00|
|> 3 years - < 5 years||7.00|
|5 years & above||7.00|
Indian Overseas Bank FD Interest Rates for Senior Citizens
Indian Overseas Bank offers special Senior Citizen FD Rates which is generally marginally higher than the rates as applicable on a regular FD and provide seniors with that extra buffer for their retirement years. As of now, the Indian Overseas Bank Senior Citizen FD rate of interest is 0.50% higher for all domestic term deposits up to 10 years. Also, the fixed deposit must be in the name of the senior citizen depositor. Note that for Special Deposits exceeding Rs.25 lakhs, the prevailing interest rates alone will apply, without the benefit of additional interest rate. Also, for Unfixed Deposit Schemes, the senior citizen rate will not be applicable.
How to Calculate Indian Overseas Bank Fixed Deposit Interest
You can take the help of online FD calculators to help compute the amount of interest you will earn on a certain principal amount. There are many online websites that have easy-to-use FD calculators that allow you to instantly calculate the interest earned.
Usually, using such online resources are very easy and comes in handy while deciding on the principal amount for investment. You just need to enter the deposit amount, the rate of Interest, and the tenure; the calculator will do the hard number crunching and present you with a breakup amount earned at maturity and the interest earned. Using an online resource helps in determining how much you want to save and invest and eliminates all the hassles of manual calculation.
You can also calculate the interest earned and the maturity value on the principal amount using the following formula.
Calculate Indian Overseas Bank FD Rate
A = P x (1 + r/n)nt
I = A - P
A = Maturity Value
P = Principal Amount
r = Rate of Interest
t = Number of Years
n = Compounded Interest Frequency
I = Interest Earned
Indian Overseas Bank FD Premature Withdrawal Penalty
FDs come with the issue of liquidity, but is still amongst the more liquid investments. You will be allowed to ‘break’ a Fixed Deposit account, provided that you pay a penalty. Keep in mind that some kinds of FDs (like a Tax Saving Scheme) come with a lock in period of 5 years, and you won’t be allowed to prematurely withdraw from it before that period is up. Be clear about the rules for withdrawal at the time of application for a Deposit account.
If you face an emergency, say for instance, a medical crisis or need immediate funds for your child’s marriage, you can withdraw the money from the deposit prematurely. The bank typically charges a nominal penalty which is communicated to you at the time of application of FD Deposit. Presently, IOB has a pre-closure charge of 1% on premature withdrawal of Term Deposits above Rs. 15,000.
You can also choose to avail loan against your deposit. IOB offers loans up to 90% of the principal amount.
Indian Overseas Bank FD – FAQS
Who is eligible to apply for a fixed deposit account?
Any Resident Individual – individually, or jointly with two or more people are eligible to book an FD with IOB. Also eligible to open an FD account are Minors, Associations, Clubs, Societies, Partnership Firms, Trusts, etc.
I want to open an FD for a short duration. What is the minimum tenure?
The tenure ranges from 7 days to as long as 10 years. But if you would like to open an FD account for 7 days to 14 days, you would be required to deposit a minimum amount of Rs. 1 Lakh.
What are the benefits of a Fixed Deposit?
FDs come with flexible options to withdraw money in times of need. It also yields a higher rate of interest when compared to a savings account.
What is the minimum amount I can deposit in an IOB FD account?
The minimum amount required to open an FD account is Rs. 1,000.