THIRUVANANTHAPURAM: The Kerala State Treasuries Department is further slashing the interest rate for fixed deposits for the second time in two months.
The new rate for deposits for one year and above is 7.50 per cent for general category and 8 per cent for senior citizens. For deposits of 180 days and above but below one year, the interest rate in general category is 6.50 pc and senior citizens 7 pc. The new rates will be applicable from January 1, 2019.
The consecutive decrease in the interest rate has disappointed prospective depositors. A good number of the FD holders in the treasuries are well-paid pensioners and government employees who would make multiple deposits within a single year.
According to Finance Secretary Manoj Joshi, the government spends huge amount as interest rate to these FDs. “Periodical rate adjustments are inevitable to maintain fiscal prudence,” he told Express.As per the data obtained in August, the department had about 5.86 lakh fixed deposit accounts and a total deposit of Rs 14,000 crore.
The Treasuries Department does not expect a fall in new deposits since the rates are well above that of nationalised banks. While in the previous revision depositors between 180 days but below one year were spared, it did not happen in the latest revision.