Major private banks like ICICI Bank, Kotak Mahindra Bank and Axis Bank have increased their fixed deposit rates after the RBI hiked the repo rate by 50 basis points. Other banks are likely to follow suit. This will be the fourth hike in the repo rate this fiscal, while the third will be an increase of 50 basis points. Since the time rate hike trends began in May, banks have followed the pattern by raising deposit and lending rates. FDs have become attractive with attractive interest rates. Some banks are also offering inflation beating rates on FDs. That said, depositors actually have a pool of options to invest their hard earned money in this traditional account due to RBI’s rate hike.
Fixed deposits are the most common and traditional investment schemes available in India that are offered by banks, NBFCs and financial institutions. FDs are risk free and provide guaranteed returns to the investors. They are perfect for those who do not want to take risk in market related instruments.
In the bi-monthly monetary policy announced on 30 September, the RBI increased the repo rate by 50 bps to 5.90%. Since May, the repo rate has been hiked by a whopping 190 basis points. Growth is on expected lines to contain inflation as the CPI remains above the RBI’s upper tolerance limit at 7% for the eighth consecutive month.
In addition, the six-member MPC has decided to focus on the return of housing to ensure that inflation remains within the target while supporting growth.
Globally, most central banks have taken an aggressive approach in their monetary policy to deal with inflationary pressures. RBI is one of them.
Srihari Gokhale, Chief Operating Officer, Lentra said, “This is a very stable policy of RBI. Given the current volatility of the global geopolitical and economic environment and the continued risk of inflation and the need for currency management, the repo increase by 50 bps I believe this approach will target the two major challenges facing the Indian economy today. First, it will control inflation from being broad-based. Second, it will address capital outflows and currency exchanges. Will mute the effect.”
Lentra CEO said, “Behind this policy, if we look at the full forecast for next year, the inflation forecast for January to March is 5.8, which will further reduce to 5% from April to June. This means that there may now be a need for a rate hike after January. Additionally, while GDP has grown by about 4% in the past two fiscal years, we are looking to increase GDP in the coming year based on the current improvement. Can expect a growth of 7.2%. In the coming months, we can expect the excess liquidity in the system to be exhausted and deposit rates to rise.”
ICICI Securities in its latest report dated October 1 said, “Banks have also increased deposit rates in the maturity bucket, with peak retail TD rates of 5.75%-6.1%. Also, wholesale peak TD rates of 6.0-6.5%% For major private banks. Now, with another 50 bps repo rate hike, the rates will be revised upwards.”
Check below the latest revisions done by major banks on your FDs 2 crore
The interest rate depends on the period a depositor chooses to park his money. Rates on FD. are less than 2 crores.
ICICI Bank FD Rates
From September 30, ICICI Bank is offering between 3% to 6.10% to the public, while the interest rate on below deposits to senior citizens ranges from 3.5% to 6.60%. 2 crores.
Maximum tax deduction a customer can avail 1,50,000 from taxable income through ICICI Bank FD. Also, ICICI Bank employees (including retired employees) will get an additional 1% interest on domestic deposits 2 crores.
The minimum amount required to open an ICICI Bank FD account is 10,000. The tenure ranges from 7 days to 10 years.
Kotak Mahindra Bank FD Rates
Kotak is offering between 2.50% to 6.20% to the general category from October 3, 2022. Here the annual yield ranges from 2.50% to 6.35%.
Meanwhile, senior citizens can earn anywhere from 3% to 6.70%. The annual yield ranges from 3% to 6.87%.
The tenure starts from 7 days and covers up to 10 years.
Axis Bank FD Rates
From October 1, the interest rates for below FDs in Axis Bank range from 2.75% to 6.15% 2 crores. Whereas senior citizens can earn from 2.75% to a maximum of 6.90% on these deposits.
The tenure starts from 7 days to a maximum of 10 years.
DCB Bank FD Rates
The interest rates here vary from 4.80% to 7.10% from 1 October. Annual Income on FD below 2 crore is between 4.80% to 8.43%.
Meanwhile, senior citizens can earn from 5.30% to 7.60% on these FDs. The annual yield ranges from 5.30% to 11.02%.
These interest rates are beating inflation as the CPI is currently at 7%.
Minimum tenure ranges from 7 days to maximum 120 months.
RBL Bank FD Rates
The bank offers between 3.25% to 7.25% on FDs below to the general category 2 crores. Similar FD rates for senior citizens range from 3.75% to 7.75% higher.
The interest rates here are also beating inflation. Rates are effective from 1 October.
Tenure ranges from 7 days to 240 months.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.