Yes Bank has announced the launch of a floating rate fixed deposit for all its domestic customers.
A floating rate fixed deposit is one in which the returns are linked to the repo rate as announced by the Reserve Bank of India (RBI).
The bank announced in a press statement that this is a novel product, wherein the rate of interest on the FD will be linked to the prevailing repo rate, thus allowing customers to get the benefit of dynamic returns on their fixed deposits.
Typically, a fixed deposit (FD) has a fixed rate of return, which remains constant throughout the tenure of the deposit. With the RBI hiking the repo rate by 90 basis points over the last two months, and likely to increase it again by a few basis points again later this year, an FD with a floating rate will offer more to depositors. Typically, a rise in repo rate leads to an increase in deposit as well as lending rates.
The bank said, customers could either choose between one- and three-year tenures as per their preference. The minimum deposit will be Rs 10,000, and the maximum will be less than Rs 5 crore.
The bank is also offering a mark-up rate, which is the additional rate of interest being offered by the bank over and above the base rate (the repo rate in this case). For investment tenure of one year to less than 18 months, the mark-up rate will be 1.10 per cent, thereby making the effective rate of return at 6 per cent. For tenures between 18 months and less than three years, the mark-up rate will be 1.60 per cent, thereby making the effective rate of return at 6.5 per cent.
Prashant Kumar, managing director and CEO, Yes bank said: “One of the main advantages of this product is that the revision on the interest rate will happen automatically and will not require any manual intervention by the bank or the customers. There has been careful deliberation and thought behind the launch of this floating rate FD, and it is another step towards further enhancing our retail product offering. ”
The bank further announced that it has also raised its interest rates on standard fixed deposit up to 6.5 per cent per annum for regular customers for a tenure of 18 months or more, and up to 7.25 per cent per annum for senior citizens for a tenure of three years or more.
Customers can give a missed call on 07127191191 or visit the nearest branch of Yes Bank to make the deposit.
