There's good news for those who are risk-averse and prefer to keep their money in bank fixed deposits (FDs). From Monday, HDFC Bank will pay a higher interest rate for FDs of more than 45 days. The bank has hiked FD rates by up to 100 basis points (100 basis points = 1%), sources said.
The bad news, however, is that the leading private sector bank has decided to hike lending rates by up to 75 basis points, also effective Monday. This implies that existing and new customers of auto and personal loans will need to shell out more. Corporate loans will also become more expensive. However, home loan customers won't be affected since they are tied to lending rates of HDFC which were last revised on March 1.
Over the past one year, the rising rate of inflation has compelled banks to hike rates by about 500 basis points in some cases. Top bankers say that by all indications, interest rates have not peaked yet. The RBI policy review scheduled for this week could see another round of hike in key rates, putting pressure on banks to go increase rates further.
According to the hiked FD rates, HDFC Bank will pay 9.25% annual rate of interest for FDs of two years 16 days to regular customers, while senior citizens will earn 50 basis points more, i.e. 9.75% in this case. For every tenure, senior citizens will earn 50 basis points more than regular depositors. The steepest hike in rates will be in the shorter tenure of 46-90 days, where the new rate will be 5%, up from 4% earlier.
HDFC Bank has also decided to hike its base rate by 50 basis points to 8.70% per annum while its new prime lending rate (PLR) will be 17.25%, up from 16.50% earlier. Surprisingly, HDFC Bank is hiking its base rate within a month of its last hike. On February 24, the bank had hiked its base rate from 8% to 8.20%. However, the hike in bank's PLR is coming after about three months. The last time it had hiked its PLR was on December 10.
For information visit to: http://www.fixeddepositindia.blogspot.com
Source - Times of india
