Multiple Banks Increase FD Rates In Dec; Offering Up To 8% Interest

In December, several banks opted to boost their fixed deposit interest rates. Kotak Mahindra Bank made a significant move by raising rates by up to 85 basis points just after the Reserve Bank of India (RBI) maintained the repo rate at 6.5 per cent for the fifth consecutive time. This adjustment meant senior citizens could now earn up to 7.80 per cent on fixed deposits ranging from 23 months to two years.

In line with this trend, other major banks like ICICI Bank, HDFC Bank, Bank of India and Federal Bank had already adjusted their fixed deposit rates earlier in the month. ICICI Bank revised rates for deposits between Rs 2 crore to Rs 5 crore, offering a range from 4.75 per cent for a seven to 14-day tenure to 7.25 per cent for periods spanning 390 days to 15 months.

HDFC Bank, on the other hand, revised rates for deposits exceeding Rs 5 crore, setting their rates between 4.75 per cent for seven to 14 days and 7.30 per cent for one year to 15 months. They also made specific adjustments for deposits between Rs 100 crore to Rs 500 crore. Kotak Mahindra Bank, apart from the notable increase for senior citizens, also raised rates for regular customers by 50 basis points across various tenures.

Bank of India initiated the rate increase trend earlier in the month, revising rates for domestic customers with deposits ranging from Rs 2 crore and above to less than Rs 10 crore. Federal Bank followed suit by offering a 7.50 per cent rate for a 500-day tenure applicable to both resident and non-resident deposits, providing senior citizens with an even more attractive rate of 8.15 per cent.

While these adjustments were made in mainstream banks, several smaller finance banks stood out by offering notably higher interest rates. Unity Small Finance Bank, for instance, led the pack with a substantial 9.5 per cent interest rate specifically for senior citizens on a fixed deposit for 1001 days, as of 6 December 2023.