IOB Fixed Deposit

Indian Overseas Bank offers multiple fixed deposits for various tenures with different interest rates to its investors. The interest rate on IOB FDs is higher in their savings account. One can invest in IOB FDs through both online and offline modes with just a minimum investment of INR 1,000. This article covers IOB FD, its features and interest rates in detail.

IOB Fixed deposit schemes

Following are the types of FD schemes offered by IOB:

• Reinvestment Deposit
• IOB 80 Plus Term Deposit
• Vardhan – Deposit for Senior Citizens
• Tax Saver Scheme
• Floating Rate Deposit
• Special Fixed Deposit (M-Q)
• Multiple Deposit Plan I
• Multiple Deposit Plan II

IOB Reinvestment Deposit

IOB’s reinvestment deposit allows the depositors to reinvest the interest into the existing deposit. Furthermore, it helps in increasing the corpus. The interest on deposit also earns interest. In other words, the scheme works with a compounding effect. Following are the features of the scheme:

• Minimum Deposits Amount: INR 1000
• FD Clouse: Depositors can close the FD without any penalty
• Renewal: The bank offers a renewal of the deposit scheme

IOB 80 Plus Term Deposit

The scheme is specially designed for Super Senior Citizens (SSC) of India. IOB recognises citizens above the age of 80 years or more as SSC. Also, IOB offers higher rates for super senior citizens (an extra 0.75%). Following are the features of the scheme:

• Tenure: 6 months to 120 months
• Minimum Deposit Amount: INR 1,000
• Maximum Deposit Amount: INR 1 crore
• Loan against FD: The depositors of the scheme can avail loan up to 90% of the deposit amount.
• Nomination Facility: Available
• Account holding type: Depositors can open a single or joint account with their spouse. Also, for a joint account, the primary account holder has to be a super senior citizen.

IOB Vardhan – Deposit for Senior Citizens

The Vardhan scheme is a senior citizen fixed deposit scheme. The scheme offers preferential interest rates for the depositors. An additional 0.50% interest is applicable to these schemes. Furthermore, the additional interest is only for residents of India. Following are the features of the scheme:

• Tenure: 15 days to 120 months
• Minimum Deposit Amount: INR 5,000
• Premature withdrawal or Premature Closure: Available
• Loan against FD: Available
• Account holding type: Depositors can open a single or joint account. Also, for a joint account, the primary account holder has to be a senior citizen.
• Renewal: Available, and also, depositors don’t need to submit age proofs.
• International debit cards: The scheme provides the free international debit card to the depositors

IOB Tax Saver Scheme

The scheme offers tax benefits on deposits for individuals residing in India. The tax savings scheme deposits qualify for tax deductions under Section 80C of the Income Tax Act. Following are the features of the scheme:

• Tenure: 5 years to 10 years
• Minimum Deposit Amount: INR 10,000
• Maximum Deposit Amount: INR 1,50,000
• Interest: Compounded quarterly and paid half-yearly
• Loan against FD: Not available
• Premature withdrawal: Not available
• Nomination Facility: Available

IOB Floating Rate Deposit

Under the floating rate deposit scheme, the interest rates keep changing. The interest is computed on updated IOB FD rates and not on the rate prevailing at the time of buying the FD. The interest rates are reset once every six months. For deposits maturing in:

• 3 to 5 years, the interest rate shall be the last six months daily average of 5 year G Sec rate.
• 5 to 10 years, the interest rate shall be the last six months daily average of 10 year G Sec rate.

Also, the bank gives an option to convert from an existing fixed-rate deposit to a floating rate deposit scheme. Following are the features of the scheme:

• Tenure: 3 years to 10 years
• Minimum Deposit Amount: INR 1,00,000
• Interest: Floating interest rates
• Loan against FD: The depositors of the scheme can avail loan up to 90% of the deposit amount.

Special Fixed Deposit (M-Q)

• The FD is eligible for depositors who seek a regular monthly or quarterly interest income. This scheme is more suitable for senior citizens and pensioners.
• The minimum deposit amount is Rs. 3,000
• The minimum investment period is 6 Months and the maximum investment period is to 120 months
• The interest is paid monthly and quarterly

Multiple Deposit Plan I

• Individuals including Salaried people, professionals, business people etc are eligible
• The minimum deposit amount is Rs. 100 and in multiples of Rs. 5
• The minimum investment period is 6 Months and the maximum period is 120 Months
• The interest is paid Quarterly compounding and paid at the time of maturity

Multiple Deposit Plan II

• Individuals either singly or jointly with two or more persons, institutions, companies, firms, societies, Traders, Professionals, salaried individuals etc.are eligible
• The minimum deposit amount is Rs: 10,000 and in multiples of Rs.1,000
• The minimum investment period is 6 Months and the maximum period is 120 Months
• The interest is paid Quarterly compounding and paid at the time of maturity

Key Features of IOB Fixed Deposit Schemes

• Tenure: The tenure of an Indian Overseas Bank FD ranges from seven days to ten years. One cannot change the tenure of their IOB FD once it has commenced.
• Minimum and maximum investment: The minimum investment in IOB FD is INR 1,000. However, there is no limit on the maximum amount of investment in Indian Overseas Bank FD.
• IOB FD rates: Indian Overseas Bank FD rates range between 3.4% and 5.2% for regular citizens and between 3.9% and 5.7% for senior citizens. Moreover, IOB offers an additional 0.5% interest to senior citizens on their FDs. IOB pays out interest-only during maturity.
• Premature withdrawal: All IOB FDs can be withdrawn prematurely except for the tax-saving FD. There is no penalty for deposits below INR 5 lakhs. For deposits greater than INR 5 lakhs, the penalty is 1%.
• Loan against FD: Indian Overseas Bank offers loans against their FDs. Investors can get up to 90% of the deposit amount as a loan against their IOB FD investment. Also, the interest rate for the loan will be 1%-2% higher than the FD rate. However, IOB will not give a loan against their tax saving FD.
• Nomination facility: Indian Overseas Bank FD investors can nominate beneficiaries for their FDs.
• Auto-renewal: Investors can opt for auto-renewal of their Indian Overseas Bank FDs.
• Safety: The Deposit Insurance Scheme of RBI covers all Indian Overseas Bank deposits. The scheme covers all Indian Overseas Bank deposits up to INR 5,00,000.
• Additional payments: Investors cannot deposit an additional amount in an Indian Overseas Bank FD once it has commenced. However, they can open a fresh Indian Overseas Bank FD with the new amount.

How to open an IOB FD deposit account?

One can open an IOB FD account through various modes such as Internet Banking, Mobile App and offline.

Internet Banking

The following steps will help an individual to open an IOB FD account through internet banking:

• Login to the IOB NetBanking account.
• Under the ‘Deposit’ tab, select the ‘Open Deposit’ option.
• The page redirects to the ‘New Deposit’ page. Click on ‘Go’ to continue, and fill in all the relevant details along with nominee details.  
• Verify all the details and click on ‘Confirm’ to book a new fixed deposit.

Through Mobile App

IOB App

The following steps will guide in opening an FD account through IOB Mobile App:

• Download the IOB App and log in.
• In the menu option, under the ‘Save’ tab, select the ‘Deposit’ option to proceed.
• Next, select the ‘Open Fixed Deposit’ option.
• Provide all the personal and nominee details.
• Verify all the details and click on ‘Confirm’ to book a new fixed deposit.

Offline IOB FD Opening

To open an IOB FD account offline, one has to visit the nearest IOB branch. Fill the IOB FD application form and submit all the supporting documents along with the deposit amount. On successfully processing the application, IOB will provide an FD receipt.

Documents required to Open an Indian Overseas Bank FD

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

• FD application form
• PAN Card
• Two photographs
• Identity proof (PAN Card, Aadhar Card, Passport, or Driving license, etc.)
• Address proof (Electricity bills, telephone bill, Aadhar card, bank statement)
• Any other documents required by a sole proprietorship, partnership, companies, HUF, and trusts.

Eligibility to Open an Indian Overseas Bank FD

To be able to open an FD account with IOB, one has to be eligible. Following is the eligibility criteria for the same.

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

Does Indian Overseas Bank offer Recurring Deposits?

Indian Overseas Bank offers recurring deposits to its depositors. IOB recurring deposits have a minimum tenure of six months and a maximum tenure of 10 years. Depositors can open an RD account either by going to the IOB branch or online using internet banking. The interest rate for regular citizens on IOB RDs is in the range of 5.75% to 6.8%, and for senior citizens, it is in the range of 6.25% to 7.3%.

Is IOB safe for FD?

Indian Overseas Bank guarantees returns in the form of interest on their FDs. Moreover, the Deposit Insurance Scheme of RBI covers all Indian Overseas Bank deposits. Also, the scheme covers all Indian Overseas Bank deposits up to INR 5,00,000. Hence, Indian Overseas Bank FDs are safe for investment.

How many years will FD double in Indian Overseas Bank?

To know in how many years Indian Overseas Bank FD will double, we can follow the 72 rule. We have to divide 72 by the interest rate, and the result will be that the number of years IOB FD will double. For example, for a 3 to 10 years tenure, the IOB FD interest rate is 5.2%. An investor can double the investment amount by investing for this tenure in IOB FD in 13.84 years (72/5.2).

Is FD interest taxable?

Only investment in Indian Overseas Bank Tax Saving FD qualifies for tax saving up to INR 1,50,000 per annum. Investment in no other IOB FDs qualifies for tax saving under Section 80C of the Income Tax Act. The interest income from IOB FD is taxable as per the investor’s income tax slab rates. Moreover, the interest income is subject to a TDS of 10% if the income from Indian Overseas Bank FD exceeds INR 40,000 per annum. For senior citizens, the limit is INR 50,000 per annum. Also, if the investor doesn’t disclose PAN Card details to the Indian Overseas Bank, then the TDS rate will be 20%.

Frequently Asked Questions