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Indian Overseas Bank FD Interest Rate

Indian Overseas Bank (IOB) was established on February 10, 1937, by Shri. M.Ct.M. Chidambaram Chettyar, a trailblazer in multiple fields. IOB was founded with the primary aim of specializing in foreig...Read More

Indian Overseas Bank Fixed Deposit Interest Rates

Note: All interest rates are updated as of 30 Jan 2024
TenureFor General Citizen (p.a)For Senior Citizen (p.a)
7 days to 14 days4 %4.5 %
15 days to 29 days4 %4.5 %
30 days to 45 days4.25 %4.75 %
46 days to 60 days4.25 %4.75 %
61 days to 90 days4.25 %4.75 %
91 days to 120 days4.5 %5 %
121 days to 179 days4.5 %5 %
180 days to 269 days4.95 %5.45 %
270 days to less than 1 year5.35 %5.85 %
1 year to less than 2 years (444 days not included)6.5 %7 %
max_returns
444 days
7.25 %7.75 %
2 years to less than 3 years (1,000 days not included)6.8 %7.3 %
3 years and above6.5 %7 %

Fixed Deposit

Fixed Deposits are one of the safest ways of investing. FD involves investing a lump-sum amount into a bank at a fixed interest rate and for a fix. Indian Overseas Bank provides several fixed deposit options for different tenures with attractive interest rates. With a minimum investment of ₹ 1,000, investors can invest in IOB FDs online or offline, and earn higher interest rates than their savings account. This article discusses the features and interest rates of IOB FDs.

Features of IOB FD

Fixed Deposit comes with the following features:

  • Facility of Premature withdrawal is available with 0 penalty fees below ₹ 5,00,000/- except for tax-saving FDs.
  • Auto renewal facilities of FDs are available.
  •  Up to ₹ 5,00,000/- all the FDs are covered under the Deposit Insurance Scheme of RBI hence good from a safety point of view.
  • The nomination facility is available with the IOB FD. 

Types of IOB Bank Fixed deposits

IOB gives a wide range of fixed deposits. And the best-fixed deposit interest rate on your FD investment. Types of FDs offered by IOB banks are:

  • Reinvestment Deposit: IOB offers a reinvestment deposit scheme that allows depositors to reinvest their interest earnings into the existing deposit, which can help increase the overall corpus. The scheme operates with a compounding effect, as the interest on the deposit also earns interest. The scheme has a minimum deposit amount of ₹ 1000, making it accessible to a wide range of customers. Additionally, depositors have the flexibility to close the FD without any penalty, which can be beneficial in case of any unforeseen circumstances. Moreover, the scheme also offers a renewal option, allowing depositors to continue investing and growing their deposits over time. Overall, IOB's reinvestment deposit scheme has some attractive features that can benefit depositors who want to increase their savings while earning interest on their deposits.
  • IOB 80 Plus Term Deposit: IOB has introduced a special scheme for Super Senior Citizens (SSC) of India, offering higher interest rates, with an additional 0.75% interest rate. The scheme allows deposits for a flexible tenure ranging from 6 to 120 months, with a minimum deposit amount of ₹ 1,000 and a maximum deposit amount of ₹ 1 crore. Depositors can also avail themselves of a loan against the FD of up to 90% of the deposit amount. The scheme also provides a nomination facility for the beneficiary to receive the deposit amount in case of any unforeseen circumstances. With such beneficial features, this scheme seems to be an ideal choice for SSCs looking to maximise their savings and financial security.
  • Vardhan – Deposit for Senior Citizens: IOB's Vardhan scheme is a senior citizen fixed deposit scheme that offers preferential interest rates with an additional 0.50% interest for Indian residents. The scheme offers a flexible tenure ranging from 15 days to 120 months, with a minimum deposit amount of ₹ 5,000. Depositors can withdraw or close the FD prematurely and also avail of a loan against the FD. The scheme allows for single or joint account holdings, with the primary account holder being a senior citizen in case of a joint account. Renewals are available without the need to submit age proofs, and depositors can also receive a free international debit card. Overall, the Vardhan scheme seems to provide some useful features for senior citizens to maximize their savings and financial security.
  • Tax Saver Scheme: IOB's Tax Savings Scheme offers tax benefits for Indian residents under Section 80C of the Income-tax Act,1961. With flexible tenure ranging from 5 to 10 years, the scheme requires a minimum deposit of INR 10,000 and a maximum deposit of ₹1,50,000. Interest on deposits is compounded quarterly and paid half-yearly. However, loans against FDs and premature withdrawal options are not available. The scheme also includes a nomination facility for beneficiaries. Overall, IOB's Tax Savings Scheme is an excellent choice for individuals looking to save on taxes while securing their savings.
  • Floating Rate Deposit: IOB's floating rate deposit scheme offers depositors the flexibility to earn interest rates that change as per IOB's updated FD rates, reset once every six months. The interest rates for deposits maturing between 3 to 5 years and 5 to 10 years are determined based on the last six months' daily average of the 5-year and 10-year G-Sec rates, respectively. The scheme allows conversion from an existing fixed-rate deposit to a floating-rate deposit. The scheme has a minimum deposit amount of ₹ 1,00,000 and offers loan facilities up to 90% of the deposit amount. Overall, the scheme seems to be a good option for depositors seeking flexibility in their investments.
  • Special Fixed Deposit (M-Q): IOB's monthly and quarterly interest income fixed deposit scheme is ideal for senior citizens and pensioners seeking a steady income. The minimum deposit amount for this scheme is ₹ 3,000, with a tenure ranging from 6 to 120 months. Interest is paid out monthly or quarterly, making it a convenient option for those in need of regular income.
  • Multiple Deposit Plan I: The IOB Fixed Deposit scheme is open to a wide range of individuals, including salaried people, professionals, business people, and more. The scheme requires a minimum deposit amount of just ₹ 100 and in multiples of ₹ 5, making it accessible to everyone. The investment period ranges from 6 to 120 months, giving depositors the flexibility to choose the tenure that suits them best. The interest is paid quarterly and compounded, providing a good return on investment, and paid out at the time of maturity. Overall, this is a great option for those looking for a secure investment with a reasonable return.
  • Multiple Deposit Plan II: The fixed deposit scheme is open to various types of individuals, institutions, and companies, with a minimum deposit amount of ₹ 10,000 and multiples of ₹ 1,000. The investment period ranges from 6 to 120 months, with quarterly compounding of interest and payment at maturity.
  • IOB Saral: IOB Saral scheme allows partial withdrawal of the deposit amount while continuing the scheme with the contracted interest rate. With a minimum deposit of ₹ 10,000, the scheme offers a flexible tenure ranging from 1 year to 10 years, with no maximum limit on the deposit amount.
  • IOB Suvidha: OB Suvidha scheme provides a Cash Credit Facility as a CC account is automatically opened along with the deposit. On maturity, the proceeds are credited only to the CC account. The deposit amount ranges from ₹ 1,00,000 with no maximum limit and can be invested for a tenure between 15 months to 10 years.
  • NRO Tax Saver: Non-resident Indians with non-investment income and long-term capital gain are eligible for IOB's tax savings scheme, which has a minimum lock-in period of 5 years and a flexible tenure ranging from 5 to 10 years. Depositors can invest a minimum of ₹ 10,000 and a maximum of INR 1,50,000, and qualify for tax exemption of up to ₹ 1,50,000 under section 80C of the Income-tax Act, 1961 (I-T Act).
  • Unfixed Deposit: The deposit scheme has a short tenure of 7 to 179 days with a high minimum deposit amount of ₹ 50 lakhs.

Pros of investing in IOB Bank Fixed Deposits

  1. Convenient- Having a savings account in an IOB bank allows you to open fixed deposits easily, and they can be liquidated whenever required. 
  2. Minimum amount- FD of amount as less as ₹1,000 can be opened with IOB bank. 
  3. Guaranteed returns- Returns are guaranteed because, unlike in the case of equity and mutual funds, they are not based on market highs and lows.
  4. Liberal payouts- IOB bank provides options for monthly or quarterly payouts of interest on FD. This is beneficial for people who wish for regular income. 
  5. Tax-benefits- Under section 80C of the I-T Act taxpayers can invest in tax-saving FD plans to reduce their tax liability.
  6. Penalty on premature withdrawal: No penalty fees are levied on premature withdrawal of ₹5,00,000 FD. 

Cons of investing in IOB Bank Fixed Deposits

  1. Not dynamic- Interest rates on IOB FD are not dynamic. So, it fails to overcome the risk of inflation. 
  2. Fixed-rate- Fixed deposits offer a fixed rate on the investment. Hence, no benefit can be availed for higher returns in cases of an increase in market interest rates. 

Documents required to open a Fixed Deposit with IOB

To open an FD account with IOB, one would need the following documents

  1. FD application form(for offline mode)
  2. PAN Card
  3. Two photographs
  4. Identity proof (PAN Card, Aadhar Card, Passport, Driving licence, etc.)
  5. Address proof (Electricity bills, telephone bills, Aadhar cards, bank statements)
  • Any other documents required for a sole proprietorship, partnership, companies, HUF, and trusts.

Eligibility to open an IOB FD

Following are the eligibility criteria to open FD in IOB-

  1. Resident individuals, including minors. Minors can invest in IOB FDs only when an adult is jointly opening an account with them.
  2. Sole proprietorship
  3. Partnership firms
  4. Public and private companies
  5. HUFs
  6. Trusts, associations and societies

How to open an FD Account

Fixed deposit accounts can be opened in both online and offline ways-

Through Mobile App- 

Step 1- Download the IOB mobile application from the app store or play store and log in.

Step 2- Select the menu option, under the ‘Save’ tab, and select the ‘Deposit’ option to proceed.

Step 3- Select the ‘Open Fixed Deposit’ option.

Step 4- Enter all the personal details and also enter the nominee details.

Step 5- Verify all the details and Click confirm to book a new deposit.

Offline way- 

Step 1- Visit the bank branch.

Step 2- Take the FD application form. 

Step 3- Fill in the required details and submit the necessary documents. 

Step 4- Submit the form to the branch. 

Step 5- On successfully processing the application, IOB will provide an FD receipt.

Through Internet banking-

Step 1- Login to the IOB NetBanking account.

Step 2- Under the ‘Deposit’ tab, select the ‘Open Deposit’ option.

Step 3- The page redirects to the ‘New Deposit’ page. Click on ‘Go’ to continue, and fill in all the relevant details along with the nominee details.  

Step 4- Verify all the details and click on ‘Confirm’ to book a new fixed deposit.

IOB Bank Fixed Deposit - Penalty on Premature Withdrawal

IOB FDs can be withdrawn prematurely except for the tax-saving FD, and there is no penalty for deposits below ₹ 5 lakhs. Deposits greater than ₹ 5 lakhs incur a penalty of 1% upon premature withdrawal.

How to close IOB FD

If you have an FD with Indian Overseas Bank and you want to close it then the following are the steps to follow:

  1. Visit your bank branch and get an FD account closure form from your branch and complete it accurately. After filling out the form, you must sign it and submit it to the branch manager or officer in charge. It's crucial to note that if there are joint holders on the account, all of them must sign the FD account closure form.
  2. All account holders are required to attach a copy of their KYC documents, including a copy of their PAN, which serves as proof of identity and address, to the FD closure form. Additionally, account holders may be requested to self-attest these documents. Kindly ensure that all necessary documents are attached to the form to avoid any delay in processing your FD closure request.
  3. Submit the FD certificate or FD receipt, the banker will verify all the documents, he/ she finds all the things are correct then you are asked to withdraw the balance amount in your account. You may either take cash withdrawal or the bank issues a cheque/ DD in your favour or the amount can be transferred to another account.

Tax implication on FD interest

  • The interest earned on all types of FDs is included in the total income and is taxable as per the prevailing slab rate.
  • As per section 80C of the I-T Act, the investor gets an exemption of ₹1,50,000 in tax saver FD investment.
  • In the case of a senior citizen (Aged above 60 years), a deduction of up to ₹50,000 is available and for non-senior citizens up to ₹40,000.
  • If the PAN is not provided then, in that case, 20% TDS is levied.
  • In case your total income is below the taxable limit i.e. ₹ 2.5 lakhs, you can avoid TDS by submitting Form 15G to the bank.
  • In the case of senior citizens if your total income is below the taxable limit then you can avoid TDS by submitting Form 15H to the bank.

FAQs

Is the nomination facility available on IOB bank FD?

Yes, banks offer nomination facilities to FD investors keeping unforeseen circumstances in mind.

How many FDs can be opened in IOB?

There is no limit on the number of FDs, you can open as many FDs as you want.

What are the available FD tenures in Indian Overseas Bank?

Indian Overseas Bank FD tenure ranges from 7 days to 9 years 11 months 25 days.

What are senior citizen fixed deposit interest rates in Indian Overseas Bank?

The senior citizen fixed deposit interest rates in Indian Overseas Bank range between 4.8% to 7.5% p.a. for an available minimum and maximum investment duration.

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Indian Overseas Bank

Calculate Indian Overseas Bank FD Returns

₹1,00,000
444 days
7 days to 14 days15 days to 29 days30 days to 45 days46 days to 60 days61 days to 90 days91 days to 120 days121 days to 179 days180 days to 269 days270 days to less than 1 year1 year to less than 2 years (444 days not included)444 days2 years to less than 3 years (1,000 days not included)3 years and above
7.25 %
Yes
No
Maturity Amount₹1,08,819

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