HDFC Bank has raised interest rates on selected tenors of fixed deposits of less than Rs 2 crore. The new interest rates came into effect on April 6, 2022.
HDFC Bank has increased its one-year FD interest rate by 10 basis points to 5.10 percent from 5 percent, according to the bank’s website. Its one-year one-day to two-year FD interest rate has also been increased by 10 basis points to 5.10 percent from 5 percent.
With effect from February 15, 2022, the State Bank of India (SBI) increased interest rates on fixed deposits (FDs) for terms longer than two years by 10-15 basis points.
According to the SBI website, the interest rate on 2-year to 3-year FDs has been raised by 10 basis points to 5.20 percent. The revised rates apply to FDs with value of less than Rs 2 crore.
At its monetary policy review on April 8, 2022, the Reserve Bank of India (RBI) decided to keep the repo and reverse repo rates unchanged. Whenever the interest rate cycle makes a U-turn from the bottom, it is typically the short to medium term interest rates that are likely to rise first. As far as long-term interest rates are concerned, it will take a little longer for these rates to go up significantly.
If you are planning to book an FD now or are looking to renew your existing FD, then it will be better to go for shorter term FD, say one year or lower, so that your deposit is not locked at a lower rate for long. Whenever the short to mid-term rates rise, you can start increasing the tenure of the FDs accordingly.