February 20: The trend seems to be catching on. Close on the heels of Syndicate Bank, three more public sector banks have revised their short-term deposits and are offering 12.5-13 per cent for 30-45 days. Punjab and Sind Bank, Vijaya Bank and Oriental Bank stunned banking circles when they decided to follow Syndicate Bank's foosteps by offering such high short-term rates. For, depositors this has come as a chance to make hay while the sun shines.At a time when sceptics are warning of a fall in interest rates in March-April, depositors should reap the maximum benefit by taking advantage of the high rates as long as they last. As the tenure is for a month or so, the liquidity is an added incentive. So long as interest rates are high, put your money in a 30-45 days deposit; when rates fall, shift to another instrument without losing much time. A clear case of having your cake and eating it too!
Punjab and Sindh Bank is currently offering 12.5 per cent for 30-90 days deposits against 10.5-11 per cent forone to three years. Compared to PSB, Vijaya Bank is offering 12.5 per cent for 46-60 days. For deposits with a long-term maturity (one to three years), the interest rate is 11.5 per cent.
Among private sector banks, Times Bank is offering 12.5 per cent for 30-45 days against 11 per cent for 180 days to one year deposits. Karnataka Bank's revised offer is 13 per cent for 30-45 days against 11 per cent up to one year. Jammu & Kashmir Bank has also recently hiked its interest rate to 13 per cent (200 basis points higher) for 30-60 days compared to 11 per cent for one to less than two years deposits.
Interestingly, Syndicate Bank is offering a 150 basis points higher interest rate for 30-45 days compared with 11 per cent for its one-year term deposits. Even the rate for a 3-5 year deposits is lower at 12 per cent compared with the short-term rates.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
