Banks hike FD interest rates ahead of festive season

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New Delhi: Most banks are increasing their deposit rates for boosting deposit to support rising credit off-take as liquidity in the banking system has narrowed.

The hike in deposit rates are in line with the Reserve Bank of India’s (RBI) 50 basis points hike in repo rate in the August monetary policy.

The State Bank of India (SBI), the largest public sector bank in the country, launched 75-day Utvas Deposit Scheme valid till October 30.

The bank is offering Fixed Deposit (FD) at a 6.10 percent interest rate. Senior citizens will get 6.60 percent on the FDs.

Bank of Baroda launched Baroda Tiranga Deposit Scheme, providing a 5.75 percent interest rate on FDs for 44-days.

The interest rate on deposits for 555 days is 6 per cent under the scheme.

The scheme is valid for deposits less than Rs 2 crore and is valid till December 31. Senior citizens will get an extra 0.5 percent on that deposit.

Another public sector bank (PSB), Canara Bank, is offering a 6 percent interest rate on FDs for 666 days. Punjab National Bank (PNB) is offering 5.75 per cent interest rates on deposits for 1,111 days.

Several private sector banks have also increased their interest rates on FDs. HDFC banks, the largest lender in the country, are offering 5.75 percent interest rates on deposits between 5 years and one day to 10 years.

ICICI bank is also offering 5.75 percent interest rates on the same tenure. Axis bank is offering 6.05 per cent interest on deposits for 17 – 18 months.

Other banks like Kotak Mahindra Bank, Indian Overseas Bank, Ujjivan Small Finance Bank have also hiked their FD interest rates.

The data from RBI showed that the deposits may be falling but the credit is on the rise. The aggregate growth in the bank deposits was 9.1 percent as of July 29, 2022, as compared to 14.5 percent a year ago, the report added.

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