FD interest rates 2023: The Reserve Bank of India (RBI) changes the repo rate, which is the rate at which banks borrow money from the RBI. If the repo rate is increased, banks tend to increase the FD interest rates to attract more customers.
The repo rate is the rate at which the RBI lends money to commercial banks, and when the RBI increases the repo rate, it becomes more expensive for banks to borrow money, leading them to increase their FD interest rates in order to attract more deposits and make up for the increased cost of borrowing.
Ujjivan Small Finance Bank hikes FD interest rates up to 8.75%
Ujjivan Small finance Bank recently revised its FD interest rates with effect from March 8, 2023.
After the revision, the bank is offering an interest rate of 8 per cent for deposits maturing between 13 months and 1 day to 559 days under Rs 2 crore. According to Ujjivan Small Finance Bank, deposits that mature in 80 weeks (560 Days), the bank is offering an interest rate of 8.25 per cent under Rs 2 crore. The bank offers a 0.50 per cent higher interest rate for senior citizens for all tenors.
State Bank of India (SBI) Sarvottam scheme
Senior citizens may receive a 7.6 per cent interest rate on one year deposits under the Sarvottam plan, while others may receive a 7.1 per cent interest rate.
SBI is also giving senior citizens 7.6 per cent interest and others 7.1 per cent under a special Amrit Kalash deposit of 400 days.
Why are banks offering higher interest rates?
RBI reviews the interest rates of banks periodically to ensure the financial stability of the banking system.
When the RBI increases the repo rate, commercial banks increase their FD rates to maintain a positive margin. When the RBI reduces the repo rate, commercial banks usually reduce their FD rates, though the extent of the reduction may vary from bank to bank.
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