Banks and other lenders are now offering higher rates on fixed deposits as credit spending increases and the RBI hikes its lending rates to banks.
Posted Date – 03:16 PM, Sat – 7 Jan 23
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Chennai: Banks and others are now offering higher rates on time deposits as credit spending has increased and the Reserve Bank of India (RBI) has raised its lending rate to banks (repo rate).
For seniors, fixed deposit interest rates reach 8% in some cases.
Interest rates on term deposits and one-year deposits, which were around 5% during Covid-19, have climbed to 7%.
State Bank of India (SBI) offers fixed deposits at 7.25% for senior citizens for tenures of 1 year to less than 2 years and for tenures of 5-10 years.
The interest rate for fixed deposits for the elderly for three to five years has been reduced to 6.75%.
For its part, HDFC Bank offers senior citizens 7% on deposits from 1 year to 15 months and 7.75% on fixed deposits for tenures ranging from 5 years 1 day to 10 years.
Nitya V, a housewife, said: “I intend to foreclose on my existing deposit and buy a new deposit if it is beneficial to me.”
If the term deposit breaks down early, then the bank will offer an interest rate applicable to the actual term.
The government has raised the Senior Citizens Savings Scheme (SCSS) interest rate to 8% for Q4FY23. SCSS rates are reviewed quarterly and are subject to periodic changes. Interest is also calculated and credited quarterly.
Similarly, non-banking financial companies (NBFCs) and housing finance companies have also raised interest rates on fixed deposits.
