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Indian Overseas Bank Fixed Deposit Rate

Fixed Deposit (FD) is a popular investment avenue sought after by many individuals. It is considered a safe and secure avenue. It is categorized as a debt instrument; these instruments provide a higher interest rate compared to savings account. Hence, many people tend to move excess funds in savings account into fixed deposits. Fixed deposits are also called as term deposits. The typical feature of fixed deposit is that there is a term for which one has to lock in the funds and for the period, the interest rate is cumulated or paid out depending on the chosen option. The maturity amount will be paid only after the term expires. The investor has the option of renewing the fixed deposit. While fixed deposits do not allow withdrawal of funds in between the term, if withdrawn due to unforeseen circumstances there is a penalty levied in the form of reduction in the capital or interest amount that has accumulated over the period.

Fixed deposit term can range between 7 days to 10 years or 15 years. Fixed deposits with a minimum lock in of 5 years also qualify for tax benefit under section 80C. The investment in fixed deposit is free of any risk and hence, in comparison to other risky investments, the returns are lower. For example, compared to debt mutual funds, equity mutual funds, equity stocks etc., the returns are lower and corresponding volatility or risk is also considered low.

Like all the other banks, Indian Overseas Bank too offers a host of fixed deposit schemes. A brief understanding of the instruments will provide clarity on the suitability of the product with respect to the financial need of the customer. Based on the suitability, the investor can choose to park the funds in an avenue best suited.

Indian Overseas Bank Fixed Deposit

Indian Overseas Bank Fixed Deposit Rate

The depositor or investor can deposit the funds with the bank for a pre-determined period after the expiration of the pre-specified period. Term deposits can range between the tenure of 7 days to 120 months in the case of Indian Overseas Bank. In the case of minors, the deposits can be of a longer tenure provided the bank is convinced that the longer tenure is in the best interest of the minor.

Indian Overseas Bank Tax Saver Scheme

The minimum investment under this scheme is Rs. 100 and maximum is Rs. 1.5 Lakh. Tax Saver Fixed Deposit Scheme is eligible for tax benefit up to Rs. 1.5 Lakh under section 80C of Income tax act 1961. The tenure for term deposit is 5 years. The investor can choose either monthly interest payout, quarterly interest payout or reinvestment option. Interest rate for Indian Overseas Bank Tax Saver Deposit stands at 6.80%.

Indian Overseas Bank Vardhan Deposit

Any senior citizens who are at the age of above 60 can open this FD account. Following are the features:

  • Minimum deposit amount is Rs.5000
  • Tenure: 15 days to 120 months
  • Joint accounts can be opened

Interest rates and payment of interest on term deposits

Indian Overseas Bank Fixed Deposit Rates

Various interest rates are applicable for deposits with varying terms. It is prescribed and revised by bank based on the trending market interest rate and competitor interest rates. The interest rates are available for public consumption, it is available on their official website. Senior citizens tend to benefit by an additional 50 bps on the fixed deposits. Depositors can ascertain the details with respect to Vardhan Scheme, also details with respect to additional interest rates are available therein. On deposits payable in less than three months or where the terminal quarter is incomplete, interest shall be paid the actual number of days on the basis of 365 days in a year. There are options extended to the depositor where the interest can be calculated on a monthly or quarterly basis. The intermediate interest calculation (monthly) warrants calculation based on simple interest method as directed by the RBI mandate. The directive indicates that the interest on term deposits will be calculated only on quarterly or yearly basis and any monthly payment would be only on a discounted value. Interest generated on the accounts can be credited back to the same account for cumulation to be paid at the end of maturity, alternatively, it may be deposited to another bank account through ECS (Electronic clearing system). It can be paid out as per the standing instructions of the depositor at applicable service charges.

Indian Overseas Bank Fixed Deposit Interest Rate

The interest rates applicable on fixed deposits are as mentioned below –

Period of DepositNew Rate (%) effective from

05-04-2018

Up to less than Rs 1 Cr
7-14 days*4.50
15-29 days4.50
30-45 Days4.50
46 -60 Days4.60
61-90 days4.60
91-120 days5.25
121-179 days5.50
180 -269 days5.75
270 days - < 1 year6.25
1 yr. - <2 yrs.6.60
 2 yrs.  to < 3yrs6.75
3 Yrs. and above6.80

*Minimum deposit of Rs. 1 Lakh

For Senior Citizens Additional Rate of 0.50% continues.

For the retired staff members, the maximum additional interest rate benefit shall be capped at 1% over and above the card rate.

Indian Overseas Bank FD – FAQS

1. What is the eligibility for opening term deposit with Indian Overseas Bank?

All resident individuals including minors and Hindu undivided families are eligible to open an FD account. In addition, sole proprietorship firms, Partnership firms and Limited companies are eligible to open an FD with Indian Overseas Bank.

2. What are the documents required for opening a term deposit with Indian Overseas Bank?

If the account holder already has a savings account, then the term deposit will automatically be opened. If the account holder is a new customer, then there is a need to submit Identity proof, Address proof, Signature proof and Age proof (for senior citizens). In addition, there is a need for an introducer (existing account holder who has held the account for the last 6 months).

3. What is the minimum and maximum tenure for term deposits with Indian Overseas Bank?

The minimum tenure for term deposits is 7 days and the maximum tenure for term deposits is 120 months.

About Indian Overseas Bank

Indian Overseas Bank was established in 1937, it is headquartered in Chennai and has a prominent presence in South India. It operates with over 3400 domestic branches of which 1150 branches in Tamil Nadu. The data is as of 31st October 2017. The bank operates with 100% networking status and has 100% CBS status for its branches. It has established and adopted best practices in terms of providing technical support. The bank was divested by the Government in the year 2000, the current Government holding is 75%.

Among the many banking services offered by Indian Overseas Bank, fixed deposits or term deposits is one of the services. Given the Government backing, there is an additional sense of safety and security which the bank has been able to establish in the minds of the investors.

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