A better option has emerged for retail investors looking to invest in fixed deposits (FD): ‘Special Rate’ short-term FD schemes. These schemes are designed for investors who want guaranteed returns in the short-term. Major banks like Bank of Baroda (BoB), State Bank of India (SBI), and Indian Bank have extended the last date of these schemes till March 31, 2025. These schemes were launched in mid-2024 and offer higher interest rates than traditional FDs.
What are ‘Special Rate’ FD Schemes?
Special FD schemes are different from traditional FDs as they offer higher interest rates on investments.
- Bank of Baroda: BoB Utsav Deposit Scheme offers 7.30% interest rate for a tenure of 400 days.
- Indian Bank: The tenure of Special Term Deposit is 300 days, with attractive interest rates available.
- State Bank of India: SBI’s Amrit Vrishti and Amrit Kalash schemes are specially designed for tenures of 444 days and 400 days.
interest rates comparison
The interest rates available on special rate FD are higher than conventional FD. For example:
- Bank of Baroda
- Traditional FD (1 year): 6.85% per annum.
- Special FD (400 days): 7.30% p.a.
- For Senior Citizens: 7.80% per annum.
- State Bank of India
- Traditional FD (1-2 years): 6.80% per annum.
- Amrit Vrishti Scheme (444 days): 7.25% p.a.
- For Senior Citizens: 7.75% per annum.
These high interest rates have made these schemes attractive for investors who want safe and guaranteed returns.
Why did banks launch these schemes?
A big trend was seen in the Indian banking sector in 2024, where credit growth (11.1%) deposit growth (9.1%) left behind. it asset-liability imbalance There was a sign of, due to which the concerns of the Reserve Bank of India (RBI) increased.
“Banks are using these special FD schemes to maintain their financial stability,” said Amol Joshi, founder, Plan Rupi Investment Services.
Through these schemes, banks are balancing their asset-liability by creating a stable deposit base.
Who should invest?
Special rate FD schemes are ideal for investors who:
- Want safe and assured returns in the short term.
- Don’t want to take risks.
- Want to benefit from higher interest rates.
- Senior citizens, as they get an additional 0.5% interest.
Special benefits for senior citizens
Senior citizens benefit more from these schemes as they are given 0.50% more interest over and above the standard interest rate. For example, the normal rate on Bank of Baroda’s BoB Utsav Deposit Scheme is 7.30%, while for senior citizens it increases to 7.80%.
Features of special rate FD schemes
- limited periodDuration: 300-444 days.
- high interest rates: Higher than traditional FD.
- safe investment: Risk low, returns guaranteed.
- Attractive option for senior citizens,
