Canara Bank has increased the interest rates on term or fixed deposits for amounts below Rs 2 crore after the Reserve Bank of India (RBI) raised the repo rate by 50 bps at the August MPC meeting.

According to the Canara Bank official website, the higher interest rates on fixed deposits are effective from August 8, 2022.

FDs come in tenures ranging from 7 days to 10 years which will now earn interest rates from 2.90% to 5.75% for the general public and 2.90% to 6.25% for senior citizens as a result of the modification.

The bank raised the 180-day to 269-day term interest rate by 15 basis points to 4.65 percent. Canara Bank increased the interest rate on fixed rate deposits from 4.55 percent to 4.65 percent for terms ranging from 270 days to less than one year. The bank raised the one-year interest rate by 20 basis points to 5.50 percent. For terms of more than one year to less than two years, there is a 15 basis point increase to 5.55 percent.

Penalty

Domestic deposits worth less than Rs. 2 crore that are prematurely closed, partially withdrawn, or extended will incur a 1% penalty. However, no interest will be payable on term deposits prematurely closed or prematurely extended before the completion of the 7th day.

According to the Canara Bank website, “For premature closure/part withdrawal/premature extension of Domestic/NRO term deposits, the Bank imposes a penalty of 1.00%. Such prematurely closed/part withdrawn/prematurely extended deposits will earn interest at 1.00% below the rate as applicable for the relevant amount slab as ruling on the date of deposit and as applicable for the period run OR 1.00% below the rate at which the deposit has been accepted, whichever is lower.”