Allahabad Bank to provide short term deposit plan at 7.6% rate

Allahabad Bank will offer a short-term deposit scheme for high-value customers.

This is meant to shore up deposit growth when banks are facing a stiff challenge to mobilise savings.

To attract large depositors, Allahabad Bank has made the new scheme as a liquid product and will not charge any penalty on premature withdrawal. However, it will not pay interest if the cash is withdrawn before seven days.

The Kolkata-based bank said it will accept deposits worth Rs 15 lakh to Rs 5 crore for a short period of seven to 179 days. It has pegged the interest rate at 7.60% a year.

The scheme will come into effect from next Monday and will available for customers only this month, the bank announced.

The bank also aims to tie-up 30 lakh new current and savings bank customers to grow deposits and rein in the cost of funds.

As inflation remains sticky, investors have shifted their preference from financial assets like bank deposits to physical gold, the price of which are soaring in every market.