ICICI Bank has reduced the interest rate by 10 basis points of its special term deposit scheme for senior citizens — Golden Years FD. Under this scheme, senior citizens will now get an additional interest rate of 0.10 per cent (over and above the existing additional rate of 0.50 per cent per annum offered to senior citizens) on retail term deposits of more than five years to up to 10 years, as per the ICICI Bank website. Earlier, this additional interest was 0.20 per cent per annum for ICICI Bank Golden Years FD.
Post revision, senior citizens will earn an interest of 6.7 per cent under the ICICI Bank Golden Years FD scheme. The new rate is effective from September 30, 2022, as per the bank’s website.
Do note that the additional rate will be available on fresh deposits opened as well as deposits renewed during the scheme period, as per the bank website. ICICI Golden Years FD scheme is available till October 7, 2022. This special rate is applicable for fixed deposits of up to Rs 2 crore with a tenure of five years one day to up to 10 years, stated the bank website.
Premature withdrawal option is also available under ICICI Bank Golden Years FD. “In case a fixed deposit is opened, and the above scheme is prematurely withdrawn or closed after, on or after five years one day, the applicable penal rate will be 1.10 per cent,” the lender said. “In case the deposit opened in the above scheme is prematurely withdrawn/closed before five years one day, the prevailing premature withdrawal policy will be applicable,” as per the bank’s website.
ICICI Bank had recently increased the interest rates by up to 25 basis points (on select tenures) on fixed deposits of up to Rs 2 crore. The modified rates came into effect on September 30, 2022.
Also Read: Should you wait for FD interest rate to reach 9% or book your FD now?
Bank FD interest rates to increase
The Reserve Bank of India (RBI) increased the repo rate by 50 basis points on September 30, 2022. The central bank has hiked the key lending rate by 190 basis points since May this year, taking the repo rate to a three-year high of 5.9 per cent. Four back-to-back repo rate hikes have given a further momentum to rising fixed deposit interest rates. Several banks including Axis Bank, Bank of India, and RBL Bank have already raised the interest rates on fixed deposits.
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“The era of low FD rates is now certainly behind us, and FD investors can expect better days ahead. The rate hike momentum is expected to continue for some more time. While the probability of hitting double-digit rate in near future is low, it is clear that FD interest rates are slated to hit 8 per cent and are inching towards the 9 per cent mark,” said Adhil Shetty, CEO, BankBazaar.com.
“While the rate transmission is slower in FD rates, reduced liquidity may spur the increase in FD rates. Nevertheless, there is still more upward movement expected in FDs and laddering FDs would continue to be a good move for the next few months,” he further added.