Fixed deposit (FD) interest rates have come down significantly during the last three years. Currently, the repo rate is at a historic low of 4 per cent, which has not changed since May 2020. Thankfully, there have been small hikes in the FD rates of some financial institutions recently, including national banks like State Bank of India. and HDFC. This indicates a lower level of rates and investors need to devise their strategy to make the most of it.
FD rate hike: Good news for new investors?
With the potential for rate hikes in the near future, India’s government securities rate, which serves as a benchmark for interest rates, has already increased from 6.46 per cent on January 3, 2022 to 6.74 per cent on January 27, 2022. Has been. one month.
As a result, banks have increased interest rates on fixed deposits (FDs). This is good news for FD investors, who have been continuously cutting interest rates by banks in the last few years.
In the last two weeks various banks like HDFC Bank, State Bank of India (State Bank Of India), IndusInd Bank, IDBI Bank etc. have increased the interest rates of various FD tenors. Others may soon follow.
State Bank of India
State Bank of India (SBI) has hiked interest rates On fixed deposits for a period exceeding 2 years. The interest rates on fixed deposits for a tenure of 2-3 years have been increased to 5.20 per cent from 5.10 per cent earlier. Meanwhile, rates on fixed deposit tenures of 2-5 years have been increased by 15 basis points to 5.45 per cent. The interest rates have been increased to 5.50 per cent for fixed deposits with a tenor of 5-10 years. The revised interest rates will be applicable from February 15, 2022.
HDFC bank
HDFC bank The interest rate on fixed deposits of one year tenor has been increased from 10 basis points to 5 per cent. Rates on deposits with a tenure of 3-5 years have been increased by 5 basis points to 5.45 per cent. The revised FD interest rates are applicable from February 14, 2022.
indusind bank
IndusInd Bank has hiked interest rates by 25 basis points across various tenors, with effect from February 16, 2022. The bank has revised the interest for a tenure of up to 180 days.
The bank is offering an interest rate of 2.75 per cent to the general public on fixed deposits in 7 to 14 days for an amount less than Rs 2 crore. IndusInd Bank is now offering a rate of 3.00 per cent on fixed deposits expiring between 15 to 30 days. Bank customers will now get interest rates of 3.25 percent and 3.50 percent on fixed deposits maturing in 31 days to 45 days and 46 days to 60 days. On deposits expiring in 61 days to 90 days and 91 days to 120 days, the non-senior citizen will now get an interest rate of 3.75 per cent and 4.00 per cent respectively.
IDBI Bank
Private sector lender IDBI Bank has increased its long-term deposit interest rates by 25 basis points and kept interest rates unchanged for the remaining tenors.
federal bank
Fixed deposits (FDs) are offered by Federal Bank at interest rates ranging from 2.50 per cent per annum to 5.60 per cent per annum. The tenure of an FD account can be anywhere from seven days to ten years. Senior citizens are eligible for higher interest rate. The Bank has revised the interest rates and the new rates are effective from 17-02-2022.
What should investors do now?
If you are planning to open a new FD or renew an existing FD, then you should opt for a smaller fixed deposit, such as one year or less, so that your money does not languish for too long at a lower rate . When the short to medium term rates go up, you can start lengthening the terms of your FD.
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