Days after the Reserve Bank of India hiked the benchmark repo rate, HDFC Bank today increased fixed deposit rates on various maturities by up to 0.6 per cent. The revised rate of interest is effective today, according to information posted on HDFC Bank’s website.

The increase in fixed deposit rates is likely to put pressure on lending rates as well. The bank has raised the interest rate on term deposits with maturity ranging between 6 months and one day to 5 years. Deposits of a maturity of 6-9 months would earn 6.75 per cent, 40 basis points higher than the previous rate.

The interest rate on fixed deposits of a longer tenure of 9 months three days to less than 1 year has been raised by 60 basis points, while for one year it has been increased by 40 basis points to 7.25 per cent. However, fixed deposits beyond 2 years and 1 day to 5 years will earn 10 basis points more than the previous rate of interest.

RBI last week increased the benchmark short-term lending rate (repo rate) at which it lends to other banks by 0.25 per cent to 6.5 per cent on inflationary concerns. Retail inflation, which is factored in by the central bank’s Monetary Policy Committee, spiked to a five-month high of 5 per cent in June on costlier fuel.

The government has mandated RBI to keep inflation at 4 per cent (+/- 2 per cent).

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