Kotak Mahindra Bank Raises FD Rates By Up To 85 BPS

Kotak Mahindra Bank has declared a rise in interest rates on Fixed Deposits (FDs) below Rs 2 crore, now offering senior citizens returns of up to 7.80 per cent. This increase, up to 85 basis points (bps), spans various tenures, enhancing potential gains, the bank announced.

For durations ranging from 23 months to 2 years, senior citizens can now earn a maximum of 7.80 per cent. The revised rates extend to tenures of 2 to 3 years, providing 7.65 per cent.

Regular customers investing less than Rs 2 crore also benefit from a 50 basis points (bps) increment for FDs spanning 3 to 4 years, now offering 7 per cent. Notably, tenures of 4 to 5 years witness a substantial hike to 7 per cent, up from the prior 6.25 per cent, according to Kotak Mahindra Bank.

Virat Diwanji, Group President and Head of Consumer Bank at Kotak Mahindra Bank, emphasised the safety and lower risk associated with Fixed Deposits, particularly for senior citizens.

This announcement follows the monetary policy committee (MPC) led by RBI Governor Shaktikanta Das, maintaining the repo rate at 6.5 per cent on 8 December 2023, for the fifth consecutive time.

While the RBI previously executed six consecutive rate hikes totaling 250 basis points before the pause in April, the subsequent adjustment in bank deposit rates has been gradual. Governor Shaktikanta Das highlighted this gradual adjustment in bank deposit rates following RBI's policy actions during October's policy review, indicating a lag initially before banks caught up with increased FD rates.