High returns deposit schemes make a comeback
By Neelima Shankar
Sep 15, 2010
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Special deposit schemes which offer higher rates of return than normal have again made a comeback in the personal finance segment. These special schemes have been reintroduced by as many as 14 banks. Dim growth pace of deposits at only 14.4% have provoked these banks to adopt this step as a means of rebalancing the asset liability mismatch.

The special products now come in terms of 390 days, 790 days and 1000 days and the interest rates associated with them is higher than that offered with regular deposits.

The drive for these deposit schemes was initiated by the largest lender of the country, State Bank of India followed by Canara Bank, Corporation Bank and United Bank of India. Amongst private banks with these products are ICICI and HDFC Bank.

"The reason behind re-introduction of such schemes was consumer preference for a product that was immensely popular when it was earlier available," SBI managing director SK Bhattacharyya said.

According to Corporation Bank executive director Asit Pal, the deposit scenario of the bank has seen an improvement in the last few months owing to the special 7.5% plan having maturity of 33 months.

"Special schemes are to attract a large chunk of funds within a short span and to bridge asset-liability gaps," Mr Pal said.


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