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SBI, HDFC Bank, Others Increase Fixed Deposit Interest Rates: Right Time to Invest?

Fixed deposit (FD) interest rates significantly dropped during the last three years. Currently, the repo rate is at a historic low of 4 per cent, which has not changed since May 2020. Thankfully, there have been small hikes recently in the FD rates of some financial institutions, including the national banks like the State Bank of India and HDFC. This hints at the bottoming out of rates and investors need to prepare their strategy to make the most out of this.

FD Rate Hike: Good News for New Investors?

With the prospect of a rate hike in the near future, India’s G-Sec rate, which serves as a benchmark for interest rates, has already climbed from 6.46 percent on January 3, 2022 to 6.74 percent on January 27, 2022, in less than a month.

As a result, banks have raised interest rates on fixed deposits (FDs). This good news for FD investors who have been stuck with decadal low interest rates as banks have been relentlessly cutting rates over the past couple of years.

Over the past two week various banks like HDFC Bank, State Bank of India (SBI), IndusInd Bank, IDBI Bank etc have hiked interest rates of various FD tenures. Others too may soon follow suit.

State Bank of India

The State Bank of India (SBI) has hiked interest rates on term deposits for tenures above 2 years. The interest rates on fixed deposits for 2-3 years tenure has been raised to 5.20 per cent from 5.10 per cent earlier. Meanwhile, the rates on 2-5 years fixed deposit tenure have been hiked by 15 basis points to 5.45 per cent. For fixed deposits having a tenure of 5-10 years, the interest rates have been increased to 5.50 per cent. The revised interest rates will be applicable from February 15, 2022.


HDFC Bank has hiked the interest rate on fixed deposits of one year tenure by 10 basis points to 5 per cent. The rates on deposits with a tenure of 3-5 years has been increased by 5 basis points to 5.45 per cent. The revised FD interest rates is applicable from February 14, 2022.

IndusInd Bank

IndusInd Bank has hiked interest rates across various tenures by 25 basis points, effective from February, 16, 2022. The bank has revised the interest for tenures till 180 days.

The bank is offering a 2.75 per cent interest rate on fixed deposits due in 7 to 14 days to the general public for amounts less than Rs 2 crore. IndusInd Bank is now offering a rate of 3.00 per cent on fixed deposits expiring between 15 to 30 days. Bank customers will now receive interest rates of 3.25 per cent and 3.50 percent on fixed deposits maturing in 31 days to 45 days and 46 days to 60 days, respectively. On deposits expiring in 61 days to 90 days and 91 days to 120 days, non-senior citizen will now get interest rates of 3.75 per cent and 4.00 per cent, respectively.


IDBI Bank, a private sector lender, has raised its long-term deposit interest rates by 25 basis points and has kept interest rates on the rest of the tenors unchanged.

Federal Bank

Fixed Deposits (FDs) are offered by Federal Bank at interest rates ranging from 2.50 per cent per annum to 5.60 per cent per annum. The term of an FD account might be anywhere from seven days to ten years. Senior citizens are eligible for a higher interest rate. The bank has revised interest rates and new rates are effective from 17-02-2022.

What Should Investors do Now?

If you’re planning to open a new FD or renew a current one, you should choose a shorter term deposit, such as one year or less, so that your money isn’t tied in at a low rate for too long. When short- to medium-term rates climb, you can start lengthening the terms of your FDs.

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