The high-yield fixed deposit plans are coming back while banks are increasing their deposits among duty- free bonds proposed by state-owned bodies. These banks’ fixed-term deposit plans carry higher interest rates than normal deposits with varying maturity period such as 365, 444 and 1,111 days. These deposit plans were thriving during 2008 and 2010 that enabled banks to gather huge money in a shorter time period.
KR Kamath, the chairman and the managing director of the Punjab National Bank said that the reintroduction of fixed-term deposit is only a marketing strategy. He added that banks will not be benefitted much in terms of price through these deposits as the interest rate on these deposits is slightly high, but they will make a great impact on the mind of the customers. Generally the banks are proposing offers of short duartions,since the depositors like to opt for shorter periods over the ever rising product prices.