Indian Bank has raised rates on its special term deposits by 15 basis points. That's according to reporting by Business Standard. The new rates start from October 23.
If you're saving in a fixed deposit, you could earn a little more interest. A basis point is one hundredth of a percent. So 15 bps is just 0.15%. It's a small bump, so check the exact rate before you book.
Key takeaways
- Indian Bank is raising special term deposit rates by 15 bps from October 23, as reported.
- 15 bps equals 0.15 percentage points, a small but real gain.
- Your existing deposits won't change. The new rate is for new bookings.
- Compare other banks before you lock in your money.
- Deposits are insured up to ₹5 lakh per depositor per bank.
How special term deposits work
A term deposit, or FD, means you park money with a bank for a fixed time. The bank pays you a set rate on it. You know your return from day one.
Special deposits are different from the regular plans. Banks run them for chosen periods, often to attract new money. They usually pay a bit more than the standard rate for a similar period.
The headline doesn't tell us the exact tenures or the new rates. So check the bank's website or visit a branch for the full details. Don't assume the raise applies to every FD plan.
One more thing helps here. The rate on your deposit is fixed on the day you book it. A later rate raise doesn't change an FD you already hold.
What changes for savers
Let's use a made-up example to see the money side. We don't know the actual rates here. So think of a special deposit moving from 6.50% to 6.65% a year.
The extra interest is 0.15% of your deposit each year. The table below shows the gain on a few deposit sizes. It's simple interest for one year, before tax.
| Deposit amount | Extra interest per year at 0.15% |
|---|---|
| ₹1,00,000 | ₹150 |
| ₹5,00,000 | ₹750 |
| ₹10,00,000 | ₹1,500 |
| ₹20,00,000 | ₹3,000 |
So on ₹5 lakh, you'd earn about ₹750 more in a year. That's nice, but it won't change your life. Some deposits add interest back to your balance. Over longer periods, the real gain can be a bit higher.
Remember that FD interest is taxable. It's added to your income and taxed at your slab rate. So your take-home gain is smaller than the figures above.
Who is affected
This news matters most to a few kinds of savers.
- New depositors: You can book the special deposit at the higher rate from October 23.
- People with a maturing FD: You can renew into the special plan if the terms suit you.
- Senior citizens: Banks often give seniors a little extra on top of the usual rate. Ask the branch how it works here.
- Existing depositors: Your current FDs stay at the old rate. Nothing changes for them.
Borrowers aren't affected by this. It only touches what the bank pays on deposits, not what it charges on loans.
What to do now
You don't need to rush. Here's a simple checklist before you act.
- Find the exact new rate and tenure on the bank's website or at a branch.
- Check the last date to book. Special plans often close after a set period.
- Compare with a few other banks on our interest rates page.
- Check the rules for early withdrawal, in case you need cash sooner.
- Keep each bank's total below ₹5 lakh if you want full deposit insurance cover.
Want to follow more stories like this? Visit our news hub for the latest on rates and savings.
Frequently asked questions
What does a 15 bps rise mean for my FD?
It means the rate goes up by 0.15 percentage points. On ₹1 lakh, that's about ₹150 more interest in a year, before tax.
Will my old Indian Bank FD get the new rate?
No. Your rate is fixed when you book the deposit. The raise applies to new special deposits from October 23.
Is my money safe in a bank FD?
Deposits are insured by DICGC up to ₹5 lakh per depositor per bank. That cover includes both your principal and the interest.
BankCreds analysis
A small raise, not a big event
A 15 bps raise is real money only on large deposits. On ₹2 lakh, it adds about ₹300 a year before tax. That's roughly the cost of a few cups of tea a month.
The bigger point is the trend. Banks often adjust deposit rates in small steps when they want more deposits. Reporting says this rise is for special deposits, so the regular rates may not have moved at all.
Don't break an old FD to chase it. Early exit usually brings a penalty, often around 0.50% to 1%. That can wipe out the gain from a 0.15% raise. The better move is to use it when a deposit matures or when you have fresh money. Also compare it with other banks first. One bank's special rate may not be the best on the market.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Business Standard — originating report https://www.business-standard.com/economy/news/indian-bank-raises-special-term-deposit-rates-by-15-bps-from-october-23-126102201451_1.html
- DICGC deposit insurance — Deposits are insured up to ₹5 lakh per depositor per bank https://www.dicgc.org.in/
- Reserve Bank of India — Banks set their own deposit rates within RBI rules https://www.rbi.org.in/
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Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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