Indian Overseas Bank FD Interest Rates 2026

What is an Indian Overseas Bank Fixed Deposit?

An Indian Overseas Bank (IOB) Fixed Deposit is a financial product that requires a minimum deposit of ₹3,000 for a fixed tenure. The interest rate is fixed at the time of booking and does not change during the deposit period. Interest can be received monthly, quarterly, annually, or at maturity, depending on the chosen scheme. IOB Premature closure is allowed (callable deposits) but may attract a penalty of up to 1%. The interest earned is taxable as per your income slab, and deposits up to ₹5 lakh are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Indian Overseas Bank Fixed Deposit: Highlights 

Indian Overseas Bank FD: Latest updates 

This is the second time within a month that Indian Overseas Bank has brought about a change in the fixed deposit rates, i.e., on June 12 and on July 1, 2025. The most recent update has been in the form of a 15 basis points (0.15%) cut in the interest rate of its 444-day FD.

Indian Overseas Bank FD Interest Rates 2026

The following tables present the latest interest rates offered by Indian Overseas Bank (IOB) for Fixed Deposits across different deposit amounts, tenures, and schemes. 

Revised rates below ₹3 Crore 

Note: Indian Overseas Bank FD interest rates (callable) w.e.f. September 15, 2025. Super senior citizens receive an additional 0.75% interest over and above the senior citizen rates.

Revised rates above ₹3 Crore 

*Indian Bank FD rates w.e.f February 16, 2026. Senior citizens do not receive the additional interest rate on deposits between ₹3 crore and ₹5 crore. The above table shows rates for Callable (withdrawable) and Non-Callable (non-withdrawable) Fixed Deposits.

Types of Indian Overseas Bank FD Schemes 

1. Reinvestment of Interest component 

   This scheme allows you to reinvest the interest earned on your deposit. It provides a simple way to compound your returns and grow your savings faster.

   • Interest Compounded - Quarterly
   • Tenure - 6 months to 10 years 
   • Minimum deposit Amount - Rs 1,000
   • Loan facility Against Deposit - Available 

2. IOB Green Deposit Scheme 

   This is a special deposit where your funds are used to finance environmentally friendly projects. You can contribute to a sustainable future while earning a competitive return.

   • Tenure - 999 days 
   • Minimum deposit Amount - Rs 1,000
   • Interest Rate - 6.80% p.a.
   • Senior Citizens Benefits - An Additional 0.5% for senior citizens 

3. IOB Eighty Plus - Term Deposit 

   This is a customized scheme for super senior citizens (aged 80 and above). It offers a higher interest rate to provide enhanced financial security.

   • Additional Benefits - 0.75% interest over the regular FD rates
   • Tenure - 6 months to 10 years
   • Overdraft or Demand Loan facility - Available 
   • Deposit Amount - can be below ₹1 crore
   • Loan facility - available up to 90% of the deposit amount

4. Vardhan 

   The Vardhan scheme is specifically for senior citizens (aged 60 and above). It provides a preferential interest rate on both fixed and recurring deposits.

   • Minimum deposit amount -  Rs 5,000
   • Additional Benefits - An Additional 0.50% interest over regular FD rates.
   • Joint accounts with a non-senior citizen - Allowed
   • Free International Debit Card - Yes 

5. Floating Rate Deposits 

   This deposit scheme's interest rates are not fixed but are linked to Government Security (G-Sec) rates. This allows your returns to adjust with market changes.

   • Minimum Deposit Amount -  Rs 1 lakh
   • Loan Facility - up to 90% against the deposit
   • Tenure -  3 years to 10 years
   • Premature Closure - Allowed 

Key Features of Indian Overseas Bank Fixed Deposits

Here are some key features of IOB Fixed Deposits in 2026 :

• Flexible Tenures: You can pick a tenure for your accommodation for just 7 days or rent it for as long as 10 years.
• Higher Interest for Senior Citizens: Senior Citizens can get another 0.50% per year over normal interest rates.
• Loan Against FD: A Loan Against FD allows you to borrow as much as 90% of your FD value in case of an urgent need. Interest rates on loans are lower than on personal loans.
• Tax Saving Option: You may use the IOB Tax Saving FD under Section 80C to help you save up to ₹1.5 lakhs in tax.
• Sweep-in/Sweep-out: IOB provides a sweep-in/sweep-out facility through specific accounts like the IOB Freedom Savings Account, where balances exceeding ₹50,000 are automatically transferred to a fixed deposit in multiples of ₹5,000. The funds are swept back as needed to maintain liquidity.
• Foreclosure Charges: Premature withdrawal of a fixed deposit is allowed, but it may incur foreclosure charges based on the deposit amount. While there is typically no penalty for deposits up to ₹15,000, a 0.50% penalty is applied to those from ₹15,001 to ₹5 lakh. For larger deposits above ₹5 lakh, including bulk deposits of ₹3 crore or more, the penalty is a flat 1.00%. 

How to Open an Indian Overseas Bank FD 

An IOB Bank fixed deposit is a secure and reliable way to grow your money. You can deposit a lump sum for a fixed period and earn a steady interest on it.

Online 

Existing Indian Overseas Bank (IOB) customers can open an FD account conveniently through digital channels.

• Net Banking or Mobile App: Log in to your IOB Net Banking account or the mobile banking app.
• Go to ‘Deposit’: Navigate to the 'Deposit' tab and select the 'Open Deposit' option.
• Enter Details: Enter the deposit amount, select the tenure, and select your FD type. 
• Terms and Conditions: Review and accept the terms and conditions, and submit the request.
• FD Receipt: The bank will book your fixed deposit instantly. You can get a digital receipt for your records.

Offline 

If you prefer a traditional method, you can visit an Indian Overseas Bank branch to open an FD - 

• Visit an IOB Branch: Go to your nearest IOB branch. Bring your ID, address proof, and the deposit amount.
• Fill Out the Form: Request and fill out the Term Deposit application form.
• Submit Documents: Provide the required KYC documents, such as your PAN card, Aadhaar card, and a recent photograph.
• Fund Transfer/Deposit: Deposit the FD amount through cash or a cheque
• Get the FD Receipt: The bank will process your application and issue a physical Fixed Deposit Receipt as confirmation.

Eligibility For IOB Bank FD 

The following individuals and entities are eligible to open a fixed deposit with Indian Overseas Bank (IOB):

• Resident Indian individuals
• Minors, with a guardian or co-applicant aged 18 or above
• Hindu Undivided Families (HUFs)
• Sole proprietors, 
• partnership firms, and 
• public/private limited companies

Key Takeaways

In 2026, Indian Overseas Bank Fixed Deposits offer interest rates of 3.50% to 6.60% p.a. to the general public and 4.00% to 7.10% p.a. to senior citizens, depending on the chosen tenure. Tenure choices are available from 7 days up to 10 years, depending on your financial plans. It’s easy to start an FD, whether you do it online or offline, with just a small amount of paperwork. Older people can receive better rates, and an IOB Tax Saving FD come with Section 80C benefits. Taking a loan or overdraft allowed on your FDs ensures you have money when you need it in an emergency. Customers can compare the best FD interest rates to make an informed decision.