Private sector lender Yes Bank has introduced a new fixed deposit product which is linked to the repo rate. The bank will offer 6 per cent interest rate (repo rate + 1.10 per cent mark up) for deposits of one year to less than 18 months and 6.5 per cent (repo rate + 1.60 per cent) for 18 months to 3 years.
The policy repo rate is currently at 4.9 per cent and was increased by 90 bps by Reserve Bank of India since May 4.
“The rate of interest on this fixed deposit (FD) will be linked to the prevailing repo rate, allowing the customers of the bank to enjoy dynamic returns on their fixed deposits,” Yes Bank said in a statement.
RBI is expected to increase the repo rate further to tackle inflationary pressures in the economy. Retail headline inflation was more than 7 per cent for all the five months in 2022.
“Floating Rate Fixed Deposit is a one-of-a-kind FD product which is yet another testament to such continuous endeavours. One of the main advantages of this product is that the revision on the interest rate will happen automatically and will not require any manual intervention by the Bank or the customers,” said Prashant Kumar, MD & CEO, Yes Bank.
“There has been careful deliberation and thought behind the launch of this floating rate FD, and it is another step towards further enhancing our retail product offering,” Kumar said.
The bank has also raised the interest rates on its standard fixed deposit, capping them at 6.5 per cent for regular customers and 7.25 per cent for senior citizens.