The Reserve Bank of India has been keeping the repo and reverse repo rates unchanged for the last 10 times. However, the possibility of an interest rate hike in the near future remains. In such a situation, what you should do as an investor, we are telling.
Make FD for short to medium term
When the interest rate cycle turns downwards, interest rates on short- to medium-term deposits usually rise first. It will take a little longer for interest rates to rise on long-term deposits. If you are planning to open a new FD or renew an existing FD, then you should opt for a short tenure FD.
Deposit for one year or less
Have an FD of one year or less so that your money doesn’t get stuck for too long at low rates. When the short to medium term interest rates go up, you can start increasing the tenure of your FD. Firstly, the interest rates of government securities are increasing. It was 6.46% on 3rd January 2022 which became 6.74% on 27th January.
The benchmark of interest rates is known as
It is known as the benchmark of interest rates. This means that interest rates are going up. Because of this, banks have started increasing the interest rate on fixed deposits. This is good news for investors. Because they are getting consistently low interest rates by banks in the last few years. In the last two weeks, many banks like HDFC Bank, SBI, IndusInd Bank, IDBI Bank etc. have increased the interest rate of FD. It is believed that other banks may also do the same soon.
IndusInd Bank increased interest
IndusInd Bank has increased the interest rate on deposits by 25 basis points with effect from February 16. The bank is now giving 3.25 percent and 3.50% interest to customers on FDs maturing in 31 days to 45 days and 46 days to 60 days. Deposits expiring in 61 days to 90 days and 91 days to 120 days will attract 3.75% and 4% interest.
Federal Bank also increased interest
Similarly, Federal Bank is giving interest ranging from 2.5 to 5.60% per annum. Senior citizens get slightly higher interest. The new interest rate of the bank has come into effect from February 17. IDBI has also increased the rate on long term deposits by 25 basis points. Earlier the bank used to give 5.25% interest rate on deposits with maturity from 5 years to 7 years. It has gone up to 5.50% since February 14.
HDFC Bank will give up to 10 bps more interest
According to the HDFC Bank website, interest on deposits of less than Rs 2 crore has been increased by 5 to 10 basis points. The new rates are applicable from 14 February 2022. The bank has reduced the 1-year FD interest rate from 4.9 to 5% and the interest rate on deposits from 3 years to 5 years from 5.40% to 5.45%.
SBI also increased the interest rate
The country’s largest bank SBI has increased the interest rate on FDs for above 2 years by 10 to 15 basis points with effect from February 15, 2022. Central Bank of India and UCO Bank have also increased the rate with effect from February 10, 2022. According to the website of the Central Bank of India, the bank will now get interest at the rate of 2.75% to 5.15% for various time deposits from February 10, 2022.
