With credit disbursements increasing and the RBI raising lending rates to banks, banks and other institutions are now offering higher interest rates on fixed deposits.
Banks and others are now offering higher interest rates on fixed deposits as credit disbursements increase and the Reserve Bank of India (RBI) raises lending rates to banks (repo rate).
In the case of senior citizens, fixed deposit rates can reach 8% in some cases.
During the Covid-19 period, the interest rate on one-year fixed deposits was in the 5% range, but it has now risen to the 7% range.
The State Bank of India (SBI) offers 7.25 percent on fixed deposits for senior citizens with terms ranging from one year to less than two years, as well as 5-10 years.
Interest rates on fixed deposits for three to five years are reduced to 6.75 percent for senior citizens.
The HDFC Bank, for its part, offers senior citizens 7% on deposits of one year to fifteen months and 7.75 percent on term deposits of five years one day to ten years.
“I intend to foreclose my existing deposit and apply for new deposits if it proves beneficial,” said Nitya V, a housewife.
If a fixed deposit is prematurely terminated, the banks will offer the interest rate applicable for the remaining term.
The government has raised the interest rate on the Senior Citizen Savings Scheme (SCSS) to 8% for the fourth quarter of fiscal year 23. The SCSS interest rate is reviewed quarterly and subject to change on a regular basis. Interest is calculated and credited quarterly as well.
Similarly, non-banking finance companies (NBFCs) and housing finance companies have raised their term deposit interest rates.
