Hike rates

FDs become attractive as major private banks raise rates thanks to RBI. Check the latest rates here

Major private banks such as ICICI Bank, Kotak Mahindra Bank and Axis Bank, among others, raised their fixed deposit rates right after RBI raised the repo rate by another 50 basis points. Other banks are expected to follow suit. It would be the fourth hike in the repo rate this fiscal year, while a third increase of 50 basis points. Since the start of the upward trend in rates in May, banks have followed the trend by increasing deposit and lending rates. FDs have become attractive with attractive interest rates. Some banks even offer anti-inflation rates on FDs. That said, depositors do indeed have a set of options to invest their hard-earned money in this traditional account, all thanks to RBI’s rising rates.

Fixed deposits are the most common and traditional investment programs available in India, offered by banks, NBFCs and financial institutions. FDs are risk-free and offer guaranteed returns to investors. They are perfect for those who don’t want to take risks with market-related instruments.

As part of the fortnightly monetary policy announced on September 30, RBI raised the repo rate by 50 basis points to 5.90%. Since May, the repo rate has been increased by 190 basis points. The rise is in line with forecasts to keep inflation under control as the CPI continues to stay above the RBI upper tolerance limit for the eighth consecutive month at 7%.

In addition, the six-member MPC decided to remain focused on withdrawing accommodation to ensure inflation remains on target going forward while supporting growth.

The majority of central banks around the world have taken an aggressive approach in their monetary policy to combat inflationary pressures. RBI is one of them.

Shrihari Gokhale, Chief Operating Officer at Lentra, said: “This is a very stable policy of the RBI. Given the current volatility in the global geopolitical and economic environment, the continued risk of inflation and the need to manage currencies, raising repo rates by 50 basis points is a welcome move. I believe this approach will target two key challenges facing the Indian economy today. First, it will prevent inflation from spreading. Second, it will mitigate the impact of capital and currency outflows.

The Lentra CEO added: “On the back of this policy, if we look at the full forecast for next year, inflation from January to March is estimated at 5.8, which will decline further to 5% d April to June. This implies that there may now be a need for a rate hike after January. Also, while GDP has grown by around 4% over the past two fiscal years, we can expect GDP growth of 7.2% over the coming year on the basis of the current correction.In the coming months, we can expect excess liquidity from the system to be drained and interest rates to deposit increase.”

ICICI Securities, in its latest report dated October 1, said: “Banks have also raised deposit rates across all maturity bands, with peak retail TD rates at 5.75% at 6 .1% In addition, TD wholesale peak rates are between 6.0% and 6.5%% for major private banks.Now, with another 50 basis point hike in the repo rate, the rates will be further revised upwards.

Check the latest revisions made by major banks on their FDs below 2 crores

The interest rate depends on the mandates a depositor chooses to park their money. Rates are on FDs below 2 crore.

ICICI Bank FD Rates

Effective September 30, ICICI Bank is offering between 3% and 6.10% to the public, while the interest rate is 3.5% to 6.60% to seniors on deposits below 2 crore.

A customer can benefit from a maximum tax deduction of 1,50,000 of taxable income through an ICICI Bank FD. In addition, ICICI Bank staff (including retired staff) will enjoy an additional 1% interest rate on domestic deposits below 2 crores.

The minimum amount to open an ICICI Bank FD account is 10,000. Terms vary from 7 days to 10 years.

Kotak Mahindra Bank FD Rates

Kotak is offering between 2.50% and 6.20% to the general category starting October 3, 2022. The annualized return here is between 2.50% and 6.35%.

Meanwhile, seniors can earn from 3% to 6.70%. The annualized return is between 3% and 6.87%.

Terms range from 7 days to 10 years inclusive.

Axis Bank FD Rates

From October 1, interest rates range from 2.75% to 6.15% at Axis Bank for the FDs below 2 crores. While seniors can earn from 2.75% to a maximum of 6.90% on these deposits.

Terms range from 7 days to a maximum of 10 years.

DCB Bank FD Rates

Interest rates vary here from 4.80% to 7.10% as of October 1st. The annualized return of the FDs below 2 crore is between 4.80% and 8.43%.

Meanwhile, seniors can earn 5.30% to 7.60% on these FDs. The annualized return ranges from 5.30% to 11.02%.

These interest rates are beating inflation since the CPI is currently at 7%.

The minimum tenure is 7 days to a maximum of 120 months.

RBL Bank FD Rates

The bank offers between 3.25% to 7.25% to the general category on the FDs below 2 crores. The rates for the same DF are higher from 3.75% to 7.75% for seniors.

Here too, interest rates are beating inflation. The rates have been in effect since October 1.

Terms range from 7 days to 240 months.

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