Indian Overseas Bank Offers 6.75% on 444-Day FD, Cuts 180 to 269 Day Rate: What Savers Do

Indian Overseas Bank has revised its fixed deposit (FD) rates, as reported by The Economic Times. The bank is now offering 6.75% on its 444-day deposit. It has also cut the rate on FDs that run for 180 to 269 days.

If you're a saver, this matters in two ways. A longer, odd-day deposit now pays well. A shorter deposit in the 180 to 269 day band now pays less than before. Check your plans before you book.

Key takeaways

• The 444-day FD at Indian Overseas Bank is now listed at 6.75%, according to reporting by The Economic Times.
• The rate on 180 to 269 day deposits has been cut.
• Locking money for 444 days gives you a higher rate but less flexibility.
• Existing FDs keep their old rate until they mature.
• Always compare the rate with other banks before you book.

How an FD rate revision works

An FD is a simple deal. You give the bank a lump sum for a fixed time. The bank pays you interest and returns your money at the end.

Banks change their FD rates from time to time. They look at their need for funds and at market rates. A bank that wants more long-term money may raise the rate for one tenor. It may lower the rate for another.

The 444-day tenor is a special one. It's not a round number like one year or two years. Banks use such tenors to attract deposits for a limited period.

The new rate applies to fresh deposits. It also applies when you renew an old one. Your running FD keeps the rate you signed up for.

What changes for savers

Here's a simple example. Say you put ₹1,00,000 in the 444-day FD at 6.75%. As simple interest, you'd earn a little over ₹8,200. Banks usually add interest every quarter. With that, you'd get closer to ₹8,500.

The table below shows simple interest only. It's a rough guide, not a bank quote.

Amount you invest	Rate	Approx. interest in 444 days	Approx. maturity value
₹50,000	6.75%	₹4,105	₹54,105
₹1,00,000	6.75%	₹8,211	₹1,08,211
₹5,00,000	6.75%	₹41,055	₹5,41,055

The cut on 180 to 269 day deposits works the other way. The headline doesn't give the new figure, so check the bank's rate card. A lower rate means less interest for the same sum and the same time.

Who is affected

New depositors feel this first. If you were planning a 6 to 9 month FD with this bank, you'll now earn less. If you can stay invested a little longer, the 444-day plan may suit you better.

Senior citizens usually get a small extra rate on top of the regular rate. Ask the branch for the exact figure for your age group.

People with running FDs don't need to worry. Your rate was fixed on the day you booked. It won't fall because of this cut.

If you have an FD maturing soon, pay attention. Renewing it will follow the new rate for that tenor.

What to do now

Don't rush. A good FD choice takes a few minutes of checking. Use this short list:

1. Decide how long you can leave the money untouched.
2. Check the bank's latest rate card for your tenor.
3. Compare it with other banks on our interest rates page.
4. Ask about the penalty for breaking the FD early.
5. Keep each bank's deposits within ₹5 lakh if you want full insurance cover.

That last point comes from deposit insurance. The DICGC, a body under the RBI, insures deposits up to ₹5 lakh per depositor per bank. This covers your principal and interest together.

For more savings and rate stories, visit our news hub.

Frequently asked questions

Will my existing Indian Overseas Bank FD earn the new rate?

No. Your running FD keeps the rate you booked it at. The new rates apply to fresh deposits and renewals.

Is a 444-day FD better than a one-year FD?

It can be, if the rate is higher and you won't need the money early. You lose some flexibility, so plan your cash needs first.

Is my money safe in a bank FD?

Bank deposits are insured up to ₹5 lakh per depositor per bank through DICGC. That cover includes both principal and interest.