PremiumListen to this article |
Private sector bank, Yes Bank on Tuesday launched Floating Rate Fixed Deposit, a novel product offering for all domestic customers. This means, Yes Bank's interest rate on fixed deposits FDs) is now being linked with the prevailing repo rate.
This will allow the customers to enjoy a repo rate hike scenario and will enable them to gain dynamic returns on their fixed deposits.
So far in two months up till now, RBI has increased the policy repo rate by 90 basis points to tackle multi-year high inflation. In May, RBI hiked the repo rate by 40 basis points and further increased it by 50 basis points.
With that, RBI's policy repo rate currently stands at 4.90%.
"Floating Rate Fixed Deposit is a unique offering designed to benefit customers by enabling them with an asset class that offers the safety of a fixed deposit along with dynamic returns which are linked to the Repo rates published by the central bank," Yes Bank said in a statement.
The floating rate FDs can be availed for a tenure of 1 year to less than 3 years. The deposit amount can be as minimum as ₹10,000 but less than ₹5 crore.
Prashant Kumar, MD & CEO, YES BANK said, “At YES BANK, we are committed to innovation and customer-centricity as the very core of our banking initiatives. We consistently strive to provide the best-in-class benefits and experience to our customers across segments. Floating Rate Fixed Deposit is a one-of-a-kind FD product which is yet another testament to such continuous endeavours."
Kumar added," 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."
Yes Bank said, to book this novel floating-rate fixed deposit, customers can give a missed call on 07127191191 or visit the nearest branch of the bank.
With this launch, Yes Bank also increased interest rates on standard FDs up to 6.50% per annum for regular customers for a tenure of 18 months and above. While the bank raised the FD rates up to 7.25% for senior citizens for a tenure of 3 years and above.
Here are the key features of the floating fixed deposits rate:
FD amount:
The minimum deposit amount is ₹10,000, while the maximum is up to ₹5 crore.
Tenures:
The minimum tenure for the floating FD rate would be 1 year to less than three years.
Frequency of ROI reset:
Yes Bank will reset the floating FD rate on monthly basis i.e. on the first day of every month subject to change in Repo rate.
Mark-up rate:
The Mark-up rate is the additional rate of interest offered by the Bank over and above the base rate which is the Repo rate in this case.
There is a mark-up rate of 1.10% for tenures starting 1 year but less than 18 months. Taking into consideration the repo rate of 4.90% and mark-up rate of 1.10%, the rate of interest on FDs will be 6% for these tenures.
Meanwhile, on tenures above 18 months to less than 3 years, there is a mark-up rate set at 1.60%. As of now, the rate of interest on these tenures will be 6.50% (repo rate of 4.90% + mark-up rate of 1.60%).
However, senior citizens have special benefits. For the elderly, Yes Bank offers a mark-up rate of an additional 0.50% on tenures from 1 year to less than 36 months on deposit amounts from ₹10,000 to less than ₹2 crore.
Meanwhile, on deposits from ₹2 crore to less than ₹5 crore, Yes Bank offers an additional mark-up rate of 0.45% to senior citizens on tenures from 1 year to less than 18 months. Also, an additional mark-up rate of 0.25% is offered to the elderlies on tenures 18 months to less than 36 months.
Penalties:
Yes Bank levies a penalty of 1% on premature withdrawal on FDs less than ₹5 crore for tenures starting 12 months to less than 36 months.
There is a penalty of 2% on tenures 182 days and less than 12 months, while a penalty of 2.50% is levied on 91 days to 181 days term, and 3% is invoked on premature withdrawal for tenures 7 days to 90 days.
Other features:
- Maximize your returns by taking advantage of the dynamic interest rate.
- Automatic reset of the interest rate monthly as per the applicable REPO rate in the previous month.
- Enjoy liquidity with an Overdraft facility on your FD. Enjoy liquidity with OD up to 90% of the principal value.
- Only reinvestment option available with payout at maturity.
- Only available for Resident Individuals & Non-Individuals.