Unity Bank raises interest rates on FDs across all tenors

Unity Bank

Unity Small Finance Bank Limited (Unity Bank) has increased the interest rates on its callable and non-callable bulk deposits (fixed deposits) across all tenors. The new interest rates will take effect on September 26, 2022. As a result of the change, retail customers may now earn up to 7.65 per cent interest per year, while seniors can earn up to 8.15 per cent interest per year.

The bank is currently giving an interest rate ranging from 4 per cent to 7 per cent on fixed deposits of more than 2 Cr to 100 Crs due in 7 days to 10 years. The bank is currently giving a maximum interest rate of 7 per cent on fixed deposits expiring in 365 days (1 year) to 10 years. Where the bank enables early withdrawals, callable deposits are a possibility. According to the bank, “for early withdrawal of fixed deposit, the interest rate due would be equivalent FD rate minus 1 per cent for the tenor for which the deposit has actually run.”

When the bank restricts premature withdrawals, non-callable deposits are one alternative. On Non-Callable Bulk Deposits of more than 2 Cr to 100 Cr and above expiring in 7 days to 10 years, the bank now provides interest rates ranging from 4 per cent to 7.25 per cent. The bank is now offering non-callable deposits with maturities ranging from two to ten years with a maximum interest rate of 7.25 per cent.

“Non-callable deposits are not offered to senior citizens due to urgency of requirement. Interest on these deposits will be calculated on a quarterly compounding basis for deposits with tenor 6 months and above,” the bank said in a press release.

Also Read | Indian Overseas Bank raises interest rates on FDs

Unity Small Finance Bank has also said that “Premature withdrawal is only allowed as an exception in cases of bankruptcy/winding up, directions by court/regulators or operational errors with the approval of Head Financial Markets and CRO. In case of such withdrawal, the customer will be eligible for the rate of interest as applicable to premature closure of term deposits, i.e., interest rates shall be 1.00 per cent below the rate applicable for the period the deposit has remained with the bank, or 1.00 per cent below the contracted rate, whichever is lower. Such penal rate may be waived in terms of extant policy on setting interest rates of liabilites.”

The interest rate on fixed deposits of less than 2 Cr at Unity Small Finance Bank is modified as of July 6, 2022. The bank is offering fixed deposits due in 7 days to 10 years at interest rates ranging from 4 per cent to 7 per cent to the general public and 4 per cent to 7.50 per cent to senior people. Fixed deposits maturing in 2 to 5 years can earn up to 7.65 per cent for the general public and 8.15 per cent for elderly persons.

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