Axis Bank launches non-callable deposits

Axis Bank, the country's third largest private sector bank, has become the first lender to launch non-callable deposits. This comes two months after the Reserve Bank of India (RBI) came out with the norms allowing banks to offer differential rates on fixed deposits Stock Market Trading Tips

Axis Bank's Fixed Deposit Plus will offer customers 10 basis points higher interest rate for depositing a minimum of Rs 15 lakh for a minimum period of 1 year and a maximum period of less than 2 years.

Non-callable deposits are ones in which premature withdrawal is not allowed. RBI had allowed banks to use "callability" as a distinguishing feature for a bank fixed deposit. With this feature, banks can now offer a differential rate of interest on the deposits Commodity Trading Tips

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"With the increasing number of customers seeking safer investment options, we are confident that the new 'Fixed Deposit Plus' scheme will offer higher earning potential, while continuing to promise guaranteed returns," said Rajiv Anand, group executive and head, retail banking, Axis Bank.

Apart from Axis Bank, no other banks so far had introduced this product and it is unlikely that more banks will immediately join the fray. Lenders say that in a falling deposit rate scenario they are not keen to offer a higher rate of interest. Moreover, some lenders are also wary about the callability feature Jupiter Astro Book 2015-2016

"At the moment the regulator has said that the deposits will not be allowed to withdraw the amount before the due date. But what if there is a need and the customer really needs the money then the banks will have to oblige. So we are a little wary about it and therefore are not planning to launch it any time soon," said the retail head of another private bank.

Another private sector bank official explained that the fact that fixed deposits (FDs) can be redeemed at any time is the most important feature and without this it may lose sheen. "People want to put their money in FDs because it allows you to withdraw it. I am not sure if there will be a demand from either corporate or retail customers to lock in their money for a fixed duration," he added, requesting anonymity Astrology & Numerology books