Why interest rate changed in FD rates for 6 months 1 day and 6 month 2 days in IDBI bank ?

POSTED BY niki ON March 31, 2014 8:30 pm COMMENTS (5)

I was thinking of opening a FD in IDBI bank.

I looked on the interest rate provided by them on this link.

http://www.idbi.com/interest-rates.asp

6 months 1 days

8.75

6 months 2 days to 499 days

9.10

What I did not understand is that why they have a different scheme for 6months 1 days?

Bcoz anyone who will wants to book for that can go for 6 months 2 days. and earn .35 interest more.

Why they make it differently?

5 replies on this article “Why interest rate changed in FD rates for 6 months 1 day and 6 month 2 days in IDBI bank ?”

  1. There is no specific reason for this , At some point they need to increase the interest rate for some duration, and one is free to make X days FD, so there will always a point when they need to increase it .

  2. ashalanshu says:

    Dear Niki, every bank do this to segregate the terms of FDs and thus asset liability.

    Thanks

    Ashal

  3. ronniejoshua says:

    Interesting!!
    Conjecture: The Banks make the relatively lesser profit lower end of the tenure given an interest rate than at the upper end of the tenure. I think this follows a quadratic function. But what is interesting they pay 1.1% extra if you hold for 3- more days!! Will definitely search for this- The tenure & Interest rates!!

    1. niki says:

      Not for 3 more days. Just for 1 more day. Still has not got my answer. why they do this?

  4. ashalanshu says:

    Dear Niki, banks are free to given interest rates for different time bands as per their choice by RBI. As a customer, it’s our choice to opt the term of FD as per our need.

    Thanks

    Ashal

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