Customers have swamped banks to put money in fixed deposits in order to garner high interest rates, as most banks plan to cut deposit rates by upto 1.25 percentage points from January 1. The daily collections have gone up nearly three-fold for some banks.
“We were collecting about Rs 1 crore daily on account of fixed and term deposits for different time periods from the last few months. However, over the last few days the average collection is hovering at around Rs 3 crore,” said a Bank of India branch manager. Interest rate
on fixed deposits has already come down by a percentage point this month and another round of cuts is expected in January and February. At present, the peak rate at fixed deposits is 10% (banks offer an additional 0.5% to senior citizens).