Banking regulator’s tighter monetary policy is witnessing its after-effects. While banks were quick to raise their lending rates soon after RBI raised its repo rates in two quick successions — it is now the turn of term deposits to move northward.
Bank of Baroda has raised its fixed deposit and savings deposit interest rates on selected tenors for deposits below ₹2 crore. These rates are applicable from June 15, 2022.
Now, the FD interest rates offered by Bank of Baroda (for less than ₹2 crore) for one year duration would be 5 percent, for a tenor between one year and 400 days, the interest rates would be 5.45 percent, the rate rises to 5.5 percent for tenor between 2 and 3 years, the rate falls to 5.35 percent for tenor between 3 and 5 years.
HDFC Bank also raises its rates
HDFC Bank also raised its interest rates on fixed deposit accounts with less than ₹2 crore after RBI raised its repo rates by 50 basis points to 4.90 percent in its latest monetary policy.
Now, its FD for one-year tenor will fetch an interest rate of 5.35 percent. At the same time, FDs of 2 years tenor will offer 5.40 percent, FDs of 3 years tenor will offer 5.6 percent interest, and FDs of 5 years tenor will offer 5.75 percent interest.
HDFC Bank also raised the interest rates on recurring deposits w.e.f. June 15, 2022. For nine-month tenor, interest rate on recurring deposits will be 4.65 percent; for 12 months, interest rate on recurring deposit (RD) is 5.35 percent; for 15 months, interest rate on RD will be 5.35 percent and for 24 months, bank will offer 5.35 percent.
All these rates increase by 50 basis point for senior citizens.
It is vital to note than HDFC Bank raised interest rates on fixed deposits (FDs) in April and February. Prior to that, the bank had raised its interest rates in January, thus raising its interest rates twice in two months.
Recently, State Bank of India (SBI), also raised its interest rates on domestic bulk term deposits equal to or more than ₹2 crores w.e.f. May 10.