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RBI's repo rate hike effect: Private banks offering as high as 6.25% on one-year fixed deposits

Several private banks have hiked interest rates on fixed deposits for one year tenure after the Reserve Bank of India raised the repo rate by 40 basis points this month

May 26, 2022 / 09:57 AM IST
In May, the Reserve Bank of India (RBI) raised the repo rate by 40 basis points to 4.4 percent (100 basis points = 1 percentage point). After the repo rate announcement, several private banks, including Axis Bank, ICICI Bank, Kotak Mahindra Bank, etc. hiked interest rates on one-year fixed deposits. The smaller private-sector banks now offer interest rates up to 6.25 percent on one-year FDs, data compiled by  BankBazaar  shows.
In May, the Reserve Bank of India (RBI) raised the repo rate by 40 basis points to 4.4 percent (100 basis points = 1 percentage point). After the repo rate announcement, several private banks, including Axis Bank, ICICI Bank, Kotak Mahindra Bank, etc. hiked interest rates on one-year fixed deposits. The smaller private-sector banks now offer interest rates up to 6.25 percent on one-year FDs, data compiled by BankBazaar shows.
savings
Due to continuing volatility in the equity markets, many risk-averse investors may consider fixed deposits as safe-havens. Investing in fixed deposits offers liquidity. The savings are useful to build an emergency corpus. Here are the banks offering the best interest on one-year FDs.

RBL Bank
RBL Bank offers 6.25 percent interest on one-year FDs. Among private banks, this bank offers the best interest rates. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year.
 IndusInd Bank  offers 6 percent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year. The minimum investment required is Rs 10,000.
IndusInd Bank offers 6 percent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year. The minimum investment required is Rs 10,000.
Bandhan Bank
Bandhan Bank, IDFC First Bank, and Yes Bank offer 5.75 percent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.05 lakh in one year. The minimum investment required is Rs 1,000 and Rs 10,000 at Bandhan Bank and Yes Bank, respectively.
DCB BANK
DCB Bank offers 5.55 percent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.05 lakh in one year. The minimum investment required is Rs 10,000.

Federal Bank
Federal Bank, Kotak Mahindra Bank, and Karur Vysya Bank offer 5.40 percent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.05 lakh in one year. The minimum investment required is Rs 1,000, Rs 5,000, and Rs 100 at Federal Bank, Kotak Mahindra Bank, and Karur Vysya Bank, respectively.
RBI
The smaller private banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.

The data on FDs is as of May 18, 2022, as given on respective websites. Interest rates given are for non-senior citizens and deposit amounts below Rs 1 crore. All listed (BSE) private banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
The data on FDs is as of May 18, 2022, as given on respective websites. Interest rates given are for non-senior citizens and deposit amounts below Rs 1 crore. All listed (BSE) private banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
first published: May 26, 2022 09:57 am
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