Bank of India raises fixed deposit rates by up to 0.75 pc

Bank of India today announced increasing fixed deposit rates of select maturities by up to 0.75 percentage point.

State-owned Bank of India today announced increasing fixed deposit rates of select maturities by up to 0.75 percentage point.

Fixed deposits less than Rs 15 lakh with maturity period of 91-179 days will earn 7.25 per cent interest as against existing 7 per cent,the bank said in a filing on the BSE.

Similarly,interest rates on 270 days to one year and 1-2 years fixed deposits will be raised by 0.25 percentage points to 8.25 per cent and 9.25 per cent respectively.

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At the same time,interest rate on 3-5 years term deposits will be increased by 0.75 percentage points to 9.25 per cent while fixed deposits above 5 years by 0.5 percentage point 9.25 per cent against existing 8.75 per cent.

The new rates would be effective from tomorrow,the Mumbai-based lender said.

The bank last revised its fixed deposit rates in June last year.

According to analysts,the fixed deposit rate hike is mainly because of tight liquidity situation.

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To improve liquidity in the system,RBI this month had reduced the cash reserve ratio (CRR)– the portion of deposits banks require to keep with the central bank — from 5.5 per cent to 4.75 per cent.

With the reduction,the central bank pumped in Rs 48,000 crore in the economy.