Context:
Public Sector Banks (PSBs) have begun adjusting their special fixed deposit schemes in the new fiscal year, often lowering interest rates or replacing existing schemes, in response to improved banking liquidity and the recent RBI repo rate cut the first since the 2020 pandemic.
Recent Changes by Major PSBs
1. Bank of Baroda (BoB)
- New Scheme: Square Drive Deposit Scheme
- Tenure: 444 days
- Interest Rate: 7.15%
- Replaces: BoB Utsav Scheme, which offered 7.30% for 400 days
2. State Bank of India (SBI)
- Withdrawn: Amrit Kalash Scheme (7.10% for 400 days)
- Continued: Amrit Vrishti Scheme
- Interest Rate: 7.10%
- Tenure: 400 days
3. Indian Bank
- Schemes Extended Till June 30, 2025:
- Ind Super 400-Day Scheme – 7.30% interest
- Ind Supreme 300-Day Scheme – 7.05% interest
4. IDBI Bank
- Utsav FD Scheme Extended Till April 30, 2025
- 300-day deposit – 7.05%
- 375-day deposit – 7.25%
- 444-day deposit – 7.35%
Market Context & Outlook
- Improved liquidity conditions have reduced the pressure on banks to offer higher deposit rates.
- The RBI’s recent repo rate cut has prompted banks to reassess liability costs.
- Most PSBs are now opting for short-term extensions of high-interest deposit schemes, signaling a gradual shift in deposit strategy for FY26.
TET
