THIRUVANANTHAPURAM: The state treasury branches witnessed heavy rush ahead of the interest rate revision for short-term deposits and fixed deposits with effect from February 1. The mother of all savings schemes that ended on Saturday offered a whopping 8.50 per cent interest rate for fixed deposits between 366 days and 10 years.
The revised rate card classifies deposits above 366 days into two. Interest for deposits between 366 days and two years is 6.40 per cent and those above two years 7.50 per cent. The new interest rate for deposits between 181 and 365 days is 5.90 per cent as against the previous 8 per cent. The rate for deposits between 91 and 180 days has come down from 7.25 per cent to 5.90 per cent and those between 46 and 90 days slashed from 6.50 per cent to 5.40 per cent.
“It was a hectic task for many treasuries, especially after mid-January. Some branches in Thiruvananthapuram ran out of passbooks on the last days. We had to ask people to come later for the deposit certificate. They were given temporary receipts to avoid crowding at branches,” said a sub-treasury officer in the district. Additional Chief Secretary (Finance) Rajesh Kumar Singh said the savings bank of the treasuries was a secure investment avenue as is evident from the rush of depositors.
“The rate revision is to reduce the spread compared to the banks,” he said, adding that the government has both an advantage and disadvantage with the savings deposits. “Benefit is in terms of liquidity support. But it has an adverse impact on the borrowing space,” he said.
TSB’s rate card impressive
Even after the cut, the rate card of Treasury Savings Bank is impressive when compared to commercial banks, post office deposits or the Kerala Bank. While Treasury Savings Bank offers 6.40 per cent interest for deposits with maturity between one year and up to less than two years, Kerala Bank, SBI and post office deposits offer 6.25 per cent, five per cent and 5.5 per cent respectively.