The RBI has continuously raised the repo rate to reduce inflation, which has led to banks raising interest rates on various savings plans like FDs and savings accounts.
Many banks have made announcements to raise interest rates in the first week of the new year, including Bandhan Bank, Punjab National Bank, Yes Bank, and Kotak Mahindra. The higher rates will be in effect for fixed deposits up to $2 crore. Moreover, according to some economists, the RBI could announce another increase in February 2023. This has boosted the additional interest rate increases in the coming days.
According to the Punjab National Bank, the interest rates on savings accounts and fixed deposits increased as of January 1. The interest rate on savings accounts was raised by PNB by 25 basis points, while up to 50 basis points raised the interest rate on fixed-rate debt. Currently, the bank is giving FDs an interest rate between 4 and 8%.
On January 1, Indian Overseas Bank (IOB) raised the interest rate on short-term fixed-rate debt (FDs) with terms of 7 to 90 days by 75 basis points. On FDs with a time of 444 days, the bank presently offers a maximum interest rate of 6.55%. Senior citizens continue to pay additional rates of 0.50% and 0.75%, respectively.
Punjab and Sind Bank announced a rise in the rate paid on fixed-term investments on January 1. For Fixed Deposits with maturities ranging from 7 to 10 years, the bank now offers 2.80% to 6.25% interest; the rate for a tenure of 601 days is 7%.
On January 5, 2023, Bandhan Bank will raise the interest rate on fixed-rate deposits. The current range for senior persons is from 3.75% to 6.60%, while the bank now provides 3.00% to 5.85% on FDs with maturities ranging from 7 days to 10 years. The bank offers maximum interest rates of 7.50% and 8% for general residents and senior citizens, respectively.
On January 4, 2023, Kotak Mahindra Bank raised interest rates on savings plans by up to 50 basis points. The bank will now offer a maximum interest rate of 7% on FDs with maturities in 390 days to less than two years to the general public, while the rate for senior persons is 7.50%.
On January 3, 2023, Yes Bank announced that the interest rate on FDs up to 2 crores would change. The bank offers interest rates for deposits ranging from seven days to one hundred and twenty months that range from 3.25% to 7.00% for the general public and 3.75% to 7.75% for senior citizens.