Latest IOB FD Interest Rate 2023 April 2023
Indian Overseas Bank (IOB), a public sector lender offers an array of fixed deposit schemes tailored for the general public and senior citizens. The maximum deposit is capped at Rs.2 crore. For the general public, IOB FD interest rates range between 4.30% and 7.75% (including senior and super senior citizens) depending on the FD tenure and scheme. Senior citizens are eligible for 0.50% higher interest rate than the normal rate, whereas super senior citizens (over 70 years) are eligible for 0.75% higher interest rate than the normal rate.
Indian Overseas Bank – IOB FD Interest Rate Highlights
| Interest rate | 4.30% to 7.75% |
| Tenure | 7 days to 10 years |
| Minimum deposit | Rs.1 lakh |
| Maximum deposit | Rs.2 crore |
| Lock-in period | 7 days (5 years for tax-saver FD) |
How to Calculate Indian Overseas Bank FD Interest Rate (Matured Amount)
There are different ways to calculate the interest and maturity value of a fixed deposit (FD), particularly the simple interest and the compound interest methods.
1. IOB FD Interest Rates – Simple Interest Calculation
Simple interest refers to the interest accrued on the initial investment amount at a predetermined interest rate for the duration of the investment period.
Suppose you invest Rs.50,000 for 3 years at a simple interest rate of 5% annually. Using the formula for simple interest, we can calculate the interest earned on the principal amount as follows:
Simple Interest = (P * R * T)/100
Where,
- P = Principal amount invested = Rs. 50,000
- R = Rate of interest (%) = 5%
- T = Tenure = 3 years
Simple Interest = (50,000 * 5 * 3) / 100 = Rs.7,500
Thus, the interest earned on the investment using the simple interest method is Rs. 7,500.
To calculate the maturity value, we simply add the principal amount and the interest earned using simple interest:
Maturity Value = Principal Amount + Simple Interest = Rs.50,000 + Rs. 7,500 = Rs. 57,500
2. IOB FD Interest Rates – Compound Interest Calculation
Another way to calculate FD maturity is through compound interest. Compound interest is earned on the accumulated interest. When you invest in an FD that offers compound interest, the interest you earn gets added to the principal amount, and this new total earns interest again in the next period. This process repeats itself, and the accumulated interest can grow significantly over time.
Let’s consider an example to illustrate the calculation of interest and maturity on FD via the compound interest method.
Suppose you invest Rs.50,000 for 5 years in IOB FD at an interest rate of 6% p.a. compounded annually
In this case, P = Rs.50,000
Interest rate = 6%
The number of compounding in a year is 1, i.e., once every year
The number of years of investment is 5 years
To calculate the maturity amount, we can use the formula for compound interest:
A = P (1+r/n) ^ (n*t)
Here,
- A = Maturity amount
- P = Principal amount invested = Rs. 50,000
- r = Rate of interest (in decimals) = 6%/100 = 0.06
- n = Number of compounding in a year = 1
- t = Number of years = 5
Substituting these values in the formula, we get:
- A = 50,000 (1+0.06/1) ^ (1*5)
- A = Rs.67,195.00
Therefore, the maturity amount after 5 years is Rs.67,195.00. The interest earned on this investment is Rs.17,195.00 (Rs.67,195.00 – Rs.50,000).
Factors that can Affect Indian Overseas Bank Fixed Deposit Rate
Listed below are the primary factors affecting Indian Overseas Bank FD interest rates:
1. Economic Conditions
The overall economic strength of a country has a significant impact on FD interest rates.
2. Reserve Bank of India (RBI) Policy
The RBI’s monetary policy directly affects FD interest rates. The cash reserve ratio and repo rate announced by the RBI determine the FD interest rates given out by banks.
3. Tenure
The duration for which an investor wishes to hold the FD affects the interest rate on the FD. Banks may offer higher interest rates for special tenures or longer durations.
4. Age
Senior citizens and super senior citizens would get preferential rates, which is above the standard IOB fixed deposit interest rate.
Also Read
Indian Overseas Bank FD Interest Rate for General Public
IOB FD interest rates can go up to 7% for general depositors. The interest rate depends on the deposit tenure and can range from 4.3% to 7%. The below table represents IOB FD rates for general depositors (excluding senior citizens).
| Tenure | Interest on Deposits Below Rs. 2 Crore |
| 7 days to 14 days | 4.5% |
| 15 to 29 days | 4.5% |
| 30 to 45 days | 4.5% |
| 46 to 60 days | 4.75% |
| 61 to 90 days | 4.75% |
| 91 to 120 days | 4.30% |
| 121 to 179 days | 4.30% |
| 180 to 269 days | 4.95% |
| 270 days to < 1 year | 5.35% |
| 1 year to < 2 years (except 444 days) | 6.45% |
| 444 days | 7% |
| 2 years to < 3 years | 6.40% |
| 3 years and above | 6.5% |
Indian Overseas Bank FD Interest Rate for Senior Citizens
Senior citizens are eligible for 0.50% higher interest rate than normal FD rates. You can earn up to 7.50% on your IOB deposits. The below table shows the IOB senior citizen FD rates.
| Tenure | Interest on Deposits Below Rs. 2 Crore |
| 7 days to 14 days | 5% |
| 15 to 29 days | 5% |
| 30 to 45 days | 5% |
| 46 to 60 days | 5.25% |
| 61 to 90 days | 5.25% |
| 91 to 120 days | 4.80% |
| 121 to 179 days | 4.80% |
| 180 to 269 days | 5.45% |
| 270 days to < 1 year | 5.85% |
| 1 year to < 2 years (except 444 days) | 6.96% |
| 444 days | 7.50% |
| 2 years to < 3 years | 6.90% |
| 3 years and above | 7% |
Indian Overseas Bank FD Interest Rate for Super Senior Citizens
Super senior citizens (above 70 years) are eligible for a 0.75% higher interest rate compared to the normal rate on their deposits. You can earn up to 7.75% on your IOB deposits provided you’re eligible. The below table shows IOB FD rates for super senior citizens.
| Tenure | Interest on Deposits Below Rs. 2 Crore |
| 7 days to 14 days | 5.25% |
| 15 to 29 days | 5.25% |
| 30 to 45 days | 5.25% |
| 46 to 60 days | 5.5% |
| 61 to 90 days | 5.5% |
| 91 to 120 days | 5.05% |
| 121 to 179 days | 5.05% |
| 180 to 269 days | 5.7% |
| 270 days to < 1 year | 5.10% |
| 1 year to < 2 years (except 444 days) | 7.2% |
| 444 days | 7.75% |
| 2 years to < 3 years | 7.15% |
| 3 years and above | 7.25% |
Indian Overseas Bank FD Interest Rate for NRI
IOB offers various fixed deposit schemes for NRIs (Non-Resident Indians). The different types of IOB NRI FD accounts are:
- IOB NRO Fixed Deposit
- IOB NRE Fixed Deposit
- IOB RFC Account (Resident Foreign Currency Account)
- IOB FCNR Account (Foreign Currency Non-Resident Account)
1. Indian Overseas Bank NRO FD Interest Rate
NRO stands for Non-Resident Ordinary, which refers to an account that allows non-resident Indians (NRIs) to manage their Indian earnings and income that they receive while residing outside of India. IOB NRO deposit account allows NRIs to deposit and manage their income earned in India. The rates are the same as the prevailing FD rate.
Other than normal NRO time deposits, Indian Overseas Bank also offers an NRO tax-saver scheme which comes with a lock-in period of 5 years. You can save up to Rs.46,800 in taxes with this scheme.
| Tenure | Interest on Deposits Below Rs. 2 Crore |
| 7 days to 14 days | 4.5% |
| 15 to 29 days | 4.5% |
| 30 to 45 days | 4.5% |
| 46 to 60 days | 4.75% |
| 61 to 90 days | 4.75% |
| 91 to 120 days | 4.30% |
| 121 to 179 days | 4.30% |
| 180 to 269 days | 4.95% |
| 270 days to < 1 year | 5.35% |
| 1 year to < 2 years (except 444 days) | 6.45% |
| 444 days | 7% |
| 2 years to < 3 years | 6.40% |
| 3 years and above | 6.5% |
2. Indian Overseas Bank NRE FD Interest Rate
Indian Overseas Bank NRE FD is a fixed deposit account designed for Non-Resident Indians (NRIs) to invest their foreign income. IOB NRE fixed deposit (FD) allows NRIs to deposit their foreign earnings, which are converted into Indian rupees. NRIs can earn up to 7% on their IOB NRE FDs.
The table below shows the Indian Overseas Bank fixed deposit rates for NRIs.
| Period of Deposit | Interest Rate |
| 1 Year to < 2 Years(Except 444 days) | 6.45% |
| 444 Days | 7.00% |
| 2 Years to < 3 Years | 6.40% |
| 3 Years and Above | 6.50% |
3. Indian Overseas Bank FCNR Rates
FCNR accounts are fixed deposit accounts that allow investment in foreign currency. They generally have a minimum tenure of 1 year and a maximum tenure of 5 years. The advantage with FCNR accounts is that the interest earned is exempt from tax. Interest earned and principal amount are fully repatriable, and many banks also offer an overdraft facility on the FCNR accounts.
Below is the table of the FCNR rates offered by Indian Overseas Bank on various currencies.
| Tenure | USD | GBP | EUR | JPY | CAD | AUD | CHF | NZD | SGD |
| 1 – 2 Years | 5 | 3 | 0.03 | 0.03 | 0.5 | 0.7 | 0 | 1 | 0.42 |
| 2 – 3 Years | 3.2 | 2.1 | 0.15 | 0.05 | 1.6 | 1 | 0 | 1.2 | 0.89 |
| 3 – 4 Years | 3.15 | 2.15 | 0.15 | 0.05 | 1.8 | 1.25 | 0.02 | 1.4 | 1.09 |
| 4 – 5 Years | 3.15 | 2.2 | 0.15 | 0.05 | 1.9 | 1.55 | 0.02 | 1.5 | 1.23 |
| Five years only | 3.15 | 2.25 | 0.15 | 0.05 | 1.95 | 1.85 | 0.02 | 1.6 | 1.39 |
4. Indian Overseas Bank RFC
A Resident Foreign Currency (RFC) account with Indian Overseas Bank can be maintained by a Non-Resident Indian (NRI) who has returned home for permanent settlement, after staying abroad for a minimum period of one year. An RFC account can be maintained in USD/EUR/GBP/JPY/AUD/CAD in the form of a Term Deposit too.
Below is a table highlighting the rates of this facility offered by Indian Overseas Bank.
| Tenure | USD | GBP | EUR | JPY | CAD | AUD |
| 6 Months – 1 Year | 1.30 | 0.85 | 0 | 0 | 0.15 | 0.05 |
| 1 – 2 Year | 5.00 | 3 | 0.03 | 0.03 | 0.5 | 0.7 |
| 2 – 3 Year | 3.20 | 2.1 | 0.15 | 0.05 | 1.6 | 1 |
| 3 Years only | 3.15 | 2.15 | 0.15 | 0.05 | 1.8 | 1.25 |
Indian Overseas Bank VS Other Banks’ FD Interest Rate
We have considered deposits below Rs.2 crore based on the common threshold in India. The upper limit for IOB FD interest rate includes interest rate on senior citizen FDs.
| Bank Name | Interest Rate |
| SBI Fixed Deposit | 3% to 7.50% |
| HDFC Fixed Deposit | 3% to 7.75% |
| ICICI Fixed Deposit | 3% to 7.60% |
| Axis Bank Fixed Deposit | 3% to 7.26% |
| IndusInd Fixed Deposit | 3.50% to 8.25% |
| Bank of Baroda Fixed Deposit | 3% to 7.55% |
| Bank of India Fixed Deposit | 3% to 7.80% |
| Punjab and Sind Bank Fixed Deposit | 2.80% – 7.60% |
| Union Bank Fixed Deposit | 3% to 8.05% |
| Kotak Bank Fixed Deposit | 2.75% to 7.70% |
| IDFC Bank Fixed Deposit | 3.50% to 8.25% |
| Central Bank of India Fixed Deposit | 4% – 6.75% |
| Canara Bank Fixed Deposit | 4% – 7.75%* |
| Yes Bank Fixed Deposit | 3.25% to 8.25% |
| Post office Fixed Deposit/Time Deposit | 6.6% to 7% |
| Bandhan Bank Fixed Deposit | 3.75% to 8.50% |
Features and Benefits of Indian Overseas Bank FD
Listed below are the primary features of Indian Overseas Bank FD:
- Minimum period of deposits: 7 days
- Maximum period of deposits: 10 years
- Senior citizens can avail of 0.50% extra interest rates and super senior citizen may avail 0.75% extra
- The minimum deposit amount to start an FD with IOB is Rs.1 lakh.
- For IOB Tax-saver FD, you can claim a tax deduction benefit of up to Rs.1.5 lakh under section 80C of the Income Tax Act
- Loans can be availed against Indian Overseas Bank fixed deposits. You can receive up to 90% of the deposit amount as a loan.
Different Types of IOB FD Schemes
Listed below are the types of FD schemes offered by IOB:
- Reinvestment Deposit
- Vardhan – Deposit for Senior Citizens
- IOB 80 Plus Term Deposit
- Floating Rate Deposit
- Tax Saver Scheme
- Multiple Deposit Plan I
- Multiple Deposit Plan II
- Special Fixed Deposit (M-Q)
- IOB Suvidha
- IOB Saral
- Unfixed Deposit
- NRO Tax Saver
1. Reinvestment Deposit
- Minimum Deposit Amount: Rs.1000
- Maximum Deposit Amount: No Upper Limit
- Eligibility: Indian Resident
- Loan Facility: Available
2. Vardhan – Deposit for Senior Citizens
- Minimum Deposit Amount: Rs.5,000
- Maximum Deposit Amount: No Upper Limit
- Eligibility: Senior citizens
- Tenure: 15 days to 120 months
- Loan Facility: Available
- The scheme provides depositors with free international debit cards.
3. IOB 80 Plus Term Deposit
- Minimum Deposit Amount: Rs.1,000
- Maximum Deposit Amount: Rs.1 crore
- Tenure: 6 months to 120 months
- Eligibility: Super senior citizens (80 years or above)
- Loan Facility: Available
4. Floating Rate Deposit
- Minimum Deposit Amount: Rs.1 lakh
- Maximum Deposit Amount: No upper limit
- Eligibility: Resident Indian
- Loan Facility: Available
5. Tax Saver Scheme
- Minimum Deposit Amount: Rs.10,000
- Maximum Deposit Amount: Rs.1.5 lakh
- Tenure: 5 years to 10 years
- Eligibility: Resident Indian
- Lock-in Period: 5 years
- Tax Benefits: Up to Rs.1.5 lakh under Section 80C of the I-T Act
6. Multiple Deposit Plan I
- Minimum Deposit Amount: Rs.100
- Maximum Deposit Amount: NA
- Tenure: 6 months to 120 months
- Eligibility: Resident Indian
7. Multiple Deposit Plan II
- Minimum Deposit Amount: Rs.10,000
- Maximum Deposit Amount: NA
- Tenure: 6 months to 120 months
- Eligibility: Resident Indian
8. Special Fixed Deposit (M-Q)
- Minimum Deposit Amount: Rs.3,000
- Maximum Deposit Amount: NA
- Tenure: 6 months to 120 months
- Eligibility: Resident Indian
9. IOB Suvidha
- Minimum Deposit Amount: Rs.1 lakh
- Maximum Deposit Amount: No upper limit
- Tenure: 15 months to 10 years
- Eligibility: Individuals (including NRIs /NRO) /Firms /Corporates/ PSUs/Institutions/HUF/Trust/Society
- Loan Facility: 90% of the loan amount
10. IOB Saral
- Minimum Deposit Amount: Rs.10,000
- Maximum Deposit Amount: No upper limit
- Tenure: 12 months to 10 years
- Eligibility: Individuals including NRIs
11. Unfixed Deposit
- Minimum Deposit Amount: Rs.50 lakh
- Tenure: 7 days to 179 days
- Eligibility: Resident Indians
12. NRO Tax Saver
- Minimum Deposit Amount: Rs.10,000
- Maximum Deposit Amount: Rs.1.5 lakh
- Tenure: 5 years to 10 years
- Eligibility: Non-Resident of Indian Origin with income other than investment income (Interest) and long term capital gain
- Lock-in Period: 5 years
Also Read
How to Invest in Indian Overseas Bank FD
The IOB FD can be invested online and offline.
Opening Indian Overseas Bank FD Online
1. Internet Banking
- Step 1: Log in to your IOB NetBanking account.
- Step 2: Click on the ‘Deposit’ tab and select the ‘Open Deposit’ option.
- Step 3: You will be redirected to the ‘New Deposit’ page, where you can enter all the required information, including nominee details.
- Step 4: Once you have verified the information, click ‘Confirm’ to book a new fixed deposit.
2. IOB Mobile App
To open an FD account through the IOB mobile app, follow these steps:
- Step 1: Download the IOB App and sign in.
- Step 2: Under the ‘Save’ tab in the menu, select the ‘Deposit’ option.
- Step 3: Choose the ‘Open Fixed Deposit’ option.
- Step 4: Fill in all the required personal and nominee information.
- Step 5: Verify the details and click on ‘Confirm’ to book a new fixed deposit.
Opening IOB FD Offline
To open an IOB FD account offline, visit the nearest Indian Overseas Bank (IOB) branch. Fill out the IOB FD application form and submit all the necessary documents and the deposit amount. The Indian Overseas Bank will provide an FD receipt upon successfully processing the application.
Documents Required to Open Indian Overseas Bank FD
You will need the following documents to start a fixed deposit with IOB:
- Aadhaar card
- PAN card
- Voter ID card
- Driving Licence
- Passport size photographs
Eligibility to Open Indian Overseas Bank FD
You must meet the following requirements to apply for a fixed deposit with IOB:
- Indian residents
- Minors with a co-applicant who is over 18 years of age
- Hindu Undivided Families (HUF)
- Sole proprietorships, partnerships, as well as private and public limited companies
Taxation on Indian Overseas Bank FD Deposit Scheme
Interest income received from the Indian Overseas Bank fixed deposit is subject to taxation according to the applicable income tax slab rates. A TDS rate of 10% is also applicable if the income from the Indian Overseas Bank FD is above Rs. 40,000 annually. For senior citizens, this limit is Rs. 50,000 per annum. However, if you fail to provide your PAN Card details to the bank, the TDS rate will be 20%.
Loan against Indian Overseas Bank FD Deposit Scheme
Indian Overseas Bank provides the opportunity to obtain loans using their Fixed Deposit investment as collateral. Depositors can receive a loan of up to 90% of the deposit made with the Indian Overseas Bank. It is important to note that the interest rate for the loan is generally 1% to 2% higher than the rate offered for a fixed deposit by the bank. Furthermore, Indian Overseas Bank does not extend loans against tax-saving FDs.
Final Word
The Indian Overseas Bank FD offers a reliable and secure way for individuals to grow their savings while ensuring capital preservation. With competitive interest rates and flexible tenure options, this investment avenue suits both short-term and long-term financial goals.
Investing in FDs gives you assured returns albeit at a lower interest rate. But to beat the rising inflation, you need to find an alternate avenue. Consider investing in Navi Mutual Fund schemes maybe? We have schemes for every investor. Wary of the market? You can mitigate the market chaos by investing with just Rs.10!
FAQs
The maximum interest rate offered by Indian Overseas Bank on fixed deposits is 7%. However, senior citizens (60 years and above) are eligible for an additional 0.5% interest and super senior citizens (80 years and above) are eligible for 0.75% extra over the standard rates.
All Indian resident individuals (aged above 18), HUFs, minors with a co-applicant, and NRIs can open an FD account with IOB.
The minimum amount required to open an FD account with the Indian Overseas Bank is Rs. 1000.
The current IOB fixed deposit interest rates vary from 4.3% to 7%. The 0.5% additional interest for senior citizens and 0.75% additional interest for super senior citizens continue to be applicable.
Yes, the Indian Overseas Bank allows you to close the FD account before maturity in some cases. However, the bank charges a penalty fee of 1% for deposits exceeding Rs. 5 lakhs if withdrawn prematurely. The charges for early withdrawal of an Indian Overseas Bank FD can change and are also contingent on the type of deposit.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
