Indian Overseas Bank was founded in February 1937, and is a significant public sector bank operating in the country. This banking institution extends both banking and investment services and has approximately US$38 billion in assets (as of 2016).
IOB has its headquarters in Chennai and has international branches in five other countries. Around 3,200 branches of IOB are located across the country, with five overseas branches and more than 2,900 ATMs.
Indian Overseas Bank has around 36 million active customers, as of 2019. A wide range of facilities from a standard bank account to investment and capital management services are extended by the bank.
IOB Fixed Deposit Interest Rates
|Tenure||Non-senior citizen and NRO FD (%)||Senior citizen FD (%)|
|9– 12 months||6.25||6.75|
|1 year – 10 years||6.40||6.90|
NRE IOB fixed deposit, on the other hand, provide interest rates at 6.40% for investments of up to Rs. 2 crore.
Types of IOB fixed deposit schemes
- Fixed deposits – As the name suggests, such investment plans require a stipulated amount of money to be locked-in for a chosen tenor to earn interests. Interest rates are usually compounded annually if applicants opt for cumulative Indian Overseas Bank fixed deposit schemes.
- Floating rate deposits – Under this scheme, the interest rate associated with investments keep fluctuating with market rates, and are subject to change every 6 months.
- Tax saver IOB fixed deposits – Fixed deposit in IOB bank having tenure of 5 years can be classified as tax saving investment plans, wherein the principal invested of up to Rs. 1.5 lakh is waivered from tax calculation, under Section 80C.
- Vardhan FD – Individuals aged 60 years and above can invest in IOB fixed deposit schemes to earn substantial interest, 0.50% higher than standard rates.
- IOB Eighty Plus FD – Catering to the super senior citizen (above 80 years) population in India, 0.75% additional interest is offered on such deposit schemes.
Benefits of IOB Fixed Deposits
Indian Overseas Bank fixed deposits come with the following benefits –
- Flexible tenure – Fixed deposits can be availed for tenures ranging from 7 days to 10 years.
- Low minimum amount – You can open an IOB fixed deposit with funds as low as Rs. 1,000.
- Nomination facility – Individuals can submit the name of a nominee who is eligible to receive the final amount in the event of the untimely demise of an applicant.
- Non-cumulative interest withdrawal – Provision for withdrawal of interest accrued every 6 months is offered.
- Loan against FD – Loan against fixed deposits can be availed, amounting to 90% of the total principal amount invested.
Individuals or entities satisfying the following criteria can opt for a fixed deposit in IOB bank –
- Resident Indians.
- Minors, if they apply with a co-applicant above the age of 18.
- Hindu Undivided Families.
- Sole traders, partnership firms, and public and private limited companies.
The following documents have to be furnished for opening an IOB FD –
- KYC documents for identification and address proof. You can submit any of the following documents for this purpose –
- Aadhaar card.
- Voter ID card.
- Driving License.
Additionally, utility bills and municipal tax receipts can be furnished as address proof.
- PAN card to fulfil taxation requirements.
- Passport-sized photographs.
A deduction of 1% on the total accrued interest is levied for premature withdrawal on fixed deposits.
Individuals not falling under the taxable income bracket can submit Form 15G and Form 15H (senior citizens) to ensure TDS is not deducted on the interest income.
Loan Against FD
As stated above, you can avail credits amounting to 90% of the corpus investment against an active fixed deposit scheme. However, such a facility is not extended on tax saver IOB fixed deposit plans. Interest rates levied on such loans range between 5.5% and 7.35%.
- Can you transfer your IOB FD scheme from one branch to another?
Yes, such facilities are extended on deposits maintained with Indian Overseas bank.
- Can I get tax exemptions?
Tax saver FDs having a lock-in period of five years can be availed to waive off tax payments on income allocated towards fixed deposit investments.
- Can I prematurely withdraw tax saver FD?
Withdrawing such fixed deposits reverses any tax benefits claimed under Section 80C.
- Will interest rate increase or decrease under floating fixed deposits?
Interest rate fluctuations depend upon changes in repo rates announced by the RBI. An increase in repo rate is likely to decrease interest levied on fixed deposits, and vice-versa.
- Is FD investment risky?
No, fixed deposits are non-market related investment plans, and hence, are not subject to market fluctuations.
- Can a minor open an IOB fixed deposit account?
Yes, provided they apply with a co-applicant.
- Who can open a fixed deposit?
People satisfying the eligibility criteria mentioned above can open a fixed deposit in IOB bank.
- Do I need to pay additional charges?
No additional charges have to be paid by the applicant while opening a fixed deposit account.
- Can I withdraw interest on before maturity?
Yes, you can withdraw interest accrued periodically if you opt for a non-cumulative investment scheme.
- What are the penalty charges on fixed deposit premature withdrawal?
1% of the total interest income is deducted if funds are withdrawn prematurely from an IOB fixed deposit.