In a move to attract more investors, the Bank of Baroda revises fixed deposit interest rates, effective from May 12, 2023.
Bank of Baroda, one of India’s leading public sector banks, has recently raised its interest rates on fixed deposits (FDs) of up to Rs 2 crore. As a result, the interest rates for the general public can go up to 7.25%, whereas senior citizens can earn up to 7.75% on their FDs in the Bank of Baroda. The revised rates are effective from May 12, 2023.
Updated Fixed Deposit Interest Rates
In its latest revision, the Bank of Baroda has offered a diverse range of interest rates catering to different maturity periods.
Short-Term Fixed Deposits
For deposits maturing between 7 and 45 days, the bank now offers an interest rate of 3%. This rate is extended for FDs maturing between 46 and 180 days, as well as those between 181 and 210 days, both of which earn an interest rate of 4.5%. Additionally, FDs maturing between 211 days and less than a year now earn an interest of 5.75%.
Medium-Term Fixed Deposits
Deposits with a tenure of one to two years will now earn an interest rate of 6.75%. For those that extend beyond two years and up to three years, the interest rate has been set at 7.05%, marking a 0.30% increase from the previous rate of 6.75%.
Long-Term Fixed Deposits
Long-term fixed deposits, with tenures ranging between three and ten years, will now accrue an interest rate of 6.50%.
Special Scheme
The bank also offers a special scheme called the “Baroda Tiranga Plus Deposit Scheme” for a tenure of 399 days, which provides the highest interest rate of 7.25%.
Below is a comprehensive breakdown of the revised interest rates:
| Tenors | Residents / General Public | Resident Indian Sr. Citizen |
|---|---|---|
| 7-45 days | 3% | 3.5% |
| 46-180 days | 4.5% | 5% |
| 181-210 days | 4.5% | 5.75% |
| 211 days – <1 year | 5.75% | 6.25% |
| 1 year | 6.75% | 7.25% |
| >1 year – 400 days | 6.75% | 7.25% |
| >400 days – 2 years | 6.75% | 7.25% |
| >2 years – 3 years | 7.05% | 7.55% |
| >3 years – 5 years | 6.5% | 7.15% |
| >5 years – 10 years | 6.5% | 7.50% |
| 399 days (Baroda Tiranga Plus Deposit Scheme) | 7.25% | 7.75% |
Increased Interest Rates for Senior Citizens
To support senior citizens, the Bank of Baroda offers an additional interest rate above the standard rates offered to the general public. For instance, deposits maturing between one and two years will yield an interest rate of 7.25%, while those maturing between two and three years will yield an interest rate of 7.55%. The highest interest rate offered to senior citizens is 7.75%, available under the special “Baroda Tiranga Plus Deposit Scheme” with a tenure of 399 days.
Bank of Baroda’s revised interest rates come with an increased differential rate for senior citizens. According to the bank’s website, “Additional 30bps over & above 50bps being paid to Senior Citizens for Retail Term Deposits of tenor Above 5 Years to 10 years has been increased to 50bps as per ALCO Meeting deliberations dated 22.12.2022 and accordingly will be paid 100bps (50bps+50bps) w.e.f. 26.12.2022 (Fresh & Renewals).”
Implications of the Revised Interest Rates
The decision to raise interest rates could have a significant impact on investors and the bank itself. For investors, especially senior citizens, the hike presents an attractive proposition to park their savings, considering the relatively low-risk nature of fixed deposits. It might also entice potential investors who had previously hesitated due to lower rates.
From the bank’s perspective, the decision could bolster its deposit base, thereby enhancing its liquidity. It could also help the bank maintain a healthy loan-to-deposit ratio, which is crucial for its stability and sustainability.
The recent revision in Bank of Baroda’s fixed deposit interest rates is a strategic move to attract more investors and support the senior citizen community. Whether you are a general investor or a senior citizen, it is crucial to understand the changes and how they may affect your financial planning. As always, it is recommended to consult with a financial advisor to understand the best investment strategy for your individual financial goals and risk appetite.