Floating rate term deposits (FRTDs), as the name suggests, are a variant of fixed deposits, wherein the rate of interest is not fixed for the entire tenor of the deposit, but moves in tandem with a reference rate, which is periodically reset. This deposit shall allow you to take advantage of Interest Rate changes without closing and re-booking their Fixed Deposits. Thus, FRTDs is ideally suited for the financially literate investor, who is not averse to taking a call on the directionality of future interest rates/inflation. The rates offered at aligned to Bank's Treasury Bill rates that are auctioned every fortnightly at the RBI website and with a mark-up that shall be re-set once every calendar year.
Advantages of IDBI Bank Floating Rate Term Deposits
- Interest Payment - The interest on the deposit is payable quarterly on the last day of each quarter.
- Interest Reset - Every 3 months, coinciding with calendar quarters – on April 1, July 1, October 1 and January 1 every year.
- Liquidity - One can avail a loan/overdraft against term deposit. At the discretion of the Branch Manager, overdraft/loan up to 90% of FRTD amount may be provided. The loan/overdraft will be given at interest rate of 2.0% p.a. above the interest rate paid on the deposit, with reduction up to 1.0% as per DoP applicable for Fixed Rate Deposits.
- Nomination facility - Nomination facility is available free of charge.
- Minor's account - A minor alone cannot open an FRTD as the maturity amount cannot be determined at the time of opening the FRTD. Minor’s account to be can opened jointly with his/her guardian only.
- Automatic Renewals - Auto Renewal option would be available for deposit with tenure above 1 year only. The deposits will be renewed automatically for same period as that of the matured deposit, at the FRTD rates prevailing at the time of maturity. Automatic renewals take place where there are no standing instructions for renewal.
- Tax deduction at source - TDS as per extant guidelines.
- Premature Withdrawal –
- Minimum Lock-in period: one year; No premature withdrawal up to one year.
- After one year, the rate applicable, in the event of premature withdrawal, would be the average benchmark rate of the immediate preceding quarter with the mark up of applicable preceding tenor e.g. If the depositor books deposit for 2 years and requests for a pre closure after 1year and 110 days the applicable rate would be the average benchmark of the preceding quarter of the last quarter the deposit had remained with the Bank (as applicable for the relevant quarter) plus the mark up of 1 year.
- The calculation of interest shall be as per extant guidelines for term deposit carrying fixed rate.
- Senior Citizen - Senior Citizens will be paid interest at 50 basis point higher that applicable FRTD rate.
IDBI Bank Floating Rate Term Deposit Features
- Who Can Open The A/C - Any Individual Singly Or jointly Minor (himself/herself or through his/her guardian), Karta of HUF
- Min. & Maximum amount - Rs. 10,000/- only and thereafter in multiple of Rs. 1,000/-. Maximum amount: Less than Rs.1 crore
- Joint accounts - Two persons can open joint accounts as:
Where there are more than two applicants, it should be
- Either or survivor*
- Former or survivor, Later or survivor
- Both or survivor**
- Both jointly
- All of them or survivors or last survivor,
- Any one or more of them or survivors or the last survivor.
- A particular person during his/her life time or survivors jointly or the last survivor
- Period of Deposit - Deposits would be accepted for a period of
- 1 year
- 2 years
- 3 years
- 5 years
- 7 years
- 10 years
- >10 – 20 years***
***Retail Deposits under Floating Rate Term Deposit (FRTD) Scheme for maturity bucket above 10 years to 20 years (non-cumulative) may also be accepted.
- Interest Rate (anchor) - Anchored to average yield at 91-Days Treasury Bills Auctions during the immediately preceding three months undertaken by RBI. This would be reset every calendar quarter.
- Confirmation of Deposit (COD) - The interest rate is floating and is not pre decided as in the case of normal fixed deposit, the COD would not contain any maturity value.
All other terms would be in line with the regular Term Deposit Product.
Disclaimer - The mark-up would be revised at the Bank's discretion. The revised mark-up would be applicable only for fresh and renewal of existing deposits.
How to Apply
Applying for a Floating Rate Term Deposit is absolutely simple. Just call Phone Banking numbers or visit your Nearest Branch. Our representative will contact you at the earliest.