ICICI Home Finance offers 11.15% on fixed deposits

Mobilising deposits

Offer on for fixed deposits of 15, 20 and 30 months

For senior citizens the interest rate is higher at 11.5 per cent

ICICI Home Finance, the housing finance arm of the largest private sector bank in the country, on Monday announced a fixed deposit scheme offering 11.15 per cent interest a year, probably the highest deposit rate being offered by a housing finance company.

The new rate, introduced for a limited period, will be for fixed deposits of 15, 20 and 30 months.

HDFC, the country’s largest housing finance company, offers 10.9 per cent for deposits above Rs 1 lakh and 11 per cent for deposits above Rs 10 lakh for 15, 20 and 30-month tenor, under its premium deposit-annual income plan, according to its Web site.

The highest rate being offered by LIC Housing Finance, the other major housing finance company, is 9.50 per cent on its 3-year and 5-year term deposits.

This special offer will be valid up to November 30, said a company spokesperson. For senior citizens, the interest rate is higher at 11.5 per cent, a press release issued by the bank said.

The new scheme can be seen as an aggressive move by ICICI group to mobilise deposits to fund its loan book, said an analyst.

The higher deposit rate comes at a time when banks are under pressure to cut deposit rates to preserve their margins. Leading public sector banks have announced that they will cut deposit rates, after the Reserve Bank of India cut CRR and repo rates on November 1.

Following the RBI signalling a lower interest rate regime, several public sector banks have cut their lending rates, while private sector banks are adopting a wait and watch approach. Ms Chanda Kochhar, Joint Managing Director, ICICI Bank, had recently said that as the cost of deposits has not yet declined, the bank will watch the market situation and take a call later on reducing its lending rate.

Source: TheHinduBusinessLine