Fixed deposit (FD) rates are getting their long-lost lustre back after a long period of low interest rates. Following two successive repo rate hikes by the Reserve Bank of India (RBI) in May and June, the banks have started to follow suit and are increasing FD rates across tenors.
Earlier this month, the RBI raised the repo rate by 0.50 per cent following its monetary policy meeting on June 8, taking the overall increase to 0.9 per cent in 36 days.
Being the most-preferred investment instrument among the people in India, FDs are known to give steady interest with no market-related risks attached to them.
After two consecutive interest rate increases by the RBI, concerns were brought up about the follow up deposit rate hikes, and the proclivity among banks to raise lending rates right away but not pass on the benefits (of rate hikes) to the depositors.
As questions have been raised time and again about banks lingering on the FD rate hikes in view of the overall rate increases, below mentioned are the new FD rates for amounts less than Rs 2 crore: -
|Bank||General Citizens||Senior Citizens|
|Canara Bank||From 2.90% to 5.75%||From 2.90% to 6.25%|
|HDFC Bank||From 2.75% to 5.75%||From 3.25% to 6.50%|
|ICICI Bank||From 2.75% to 5.70%||From 3.25% to 6.20%|
|State Bank of India (SBI)||From 2.90% to 5.50%||From 3.40% to 6.30%|
|Punjab National Bank (PNB)||From 3% to 5.5%||From 3.50% to 6%|
|Kotak Mahindra Bank||From 2.50% to 5.90%||From 3% to 6.56%|
|DCB Bank||From 4.80% to 6.60%||From 5.30% to 7.10%|
Furthermore, Yes Bank on June 21 unveiled a new FD product linked to RBI’s repo rate. The private sector lender will offer a 6 per cent interest rate (repo rate + 1.10 per cent mark up) for deposits of one year to less than 18 months and 6.5 per cent (repo rate + 1.60 per cent) for 18 months to three years.
Thus far, an external benchmark-linked rate has been popular on the lending part, however, it was not the case for deposits.