Chennai-based Indian Bank today revised interest rates on fixed deposits, effective from September 1.

Interest rates on term deposits of tenure one to less than three years have been revised to 9 per cent, Indian Bank informed the Bombay Stock Exchange.

Fixed deposits of 3-5 years would now draw an interest rate of 8.75 per cent, it said, adding that a maturity period of over five years would attract a rate at 8.5 per cent.

The short-term deposit rates of tenure 180-364 days and 91-179 days has been fixed at 7 per cent and 6.5 per cent respectively, it added.

Following the Reserve Bank’s decision to increased the mandatory cash deposits of all banks, or cash reserve ratio, by 0.5 per cent to 7 per cent in its monetary policy review on July 31, many banks lowered the deposit rates.

Major banks like ICICI Bank and State Bank of India decreased interest rates on short-term deposits during the month. Other banks that reduced deposit rates were Bank of India, Bank of Baroda, Centurion Bank of Punjab and State Bank of Bikaner and Jaipur.