HDFC Bank raises fixed deposit rates by up to 0.6%

Days after Reserve Bank of India hiked the benchmark, repo rate, HDFC Bank today increased fixed deposit rates on various maturities by up to 0.6 per cent. The revised rate of interest is effective today, as per the information posted on HDFC Bank website. The increase in fixed deposit rates is likely to put pressure on lending rate as well. The bank has raised interest rate on term deposit with maturity ranging between 6 months one day to 5 years.

The deposit of maturity 6-9 months would earn 6.75 per cent, 40 basis points higher than previous rate. Interest rate on fixed deposit of longer tenure of 9 months three days to less than 1 year has been raised by 60 basis points while for one year it has been increased by 40 basis points to 7.25 per cent. However, fixed deposit beyond 2 years 1 days to 5 years will earn 10 basis points higher rate of interest than the previous.

RBI last week increased the benchmark short-term lending rate (repo rate), at which it lends to other banks, by 0.25 per cent to 6.5 per cent on inflationary concerns. The retail inflation, which is factored in by the central bank's Monetary Policy Committee, spiked to a five-month high of 5 per cent in June on costlier fuel.

The government has mandated RBI to keep inflation at 4 per cent (+/- 2 per cent).