HDFC Bank hikes deposit rates by 1 percent for select tenures

NEW DELHI: Taking a cue from the upward trajectory in the benchmark government bond yield over the past few days, HDFC Bank has hiked interest rates on its fixed deposits (FD) for select tenures below Rs 1 crore. With this latest hike, HDFC Bank’s FDs will now earn higher rate of interest compared with the country’s largest lender, State Bank of India (SBI).

It is not just SBI, HDFC Bank’s rates are higher compared with some of the other big private and public sector banks.

HDFC Bank has increased interest rates on some tenures by 100 basis points (bps) or 1 percent. One basis point is 0.01 percentage point. According to the bank's website, tenures above two years will now earn 7 percent instead of 6 percent. Further, the interest rate for the one-year bucket has been hiked to 6.85 percent from 6.75 percent, and 1 year 17 days to 2 years has been increased to 7 percent from 6.25 percent.

Here's a snapshot HDFC Bank's of old rates versus new rate:

Here's a look at the deposit rates offered by various other banks:
SBI term deposit rates with effect from March 28, 2018

ICICI Bank deposit rates (For deposits with pre-mature withdrawal facility; w.e.f. 11.12.17)

Bank of Baroda deposit rates (w.e.f. 09.03.18)

Axis Bank deposit rates (w.e.f. 10.04.2018)

IDBI Bank deposit rates (w.e.f. 23.04.2018)

Future course of interest rates
Ever since the last Reserve Bank of India (RBI) monetary policy on April 5, the benchmark 10-year government securities yield has been moving upwards. From a low of 7.127 percent on April 5, on April 26 the 10-year G-sec yield was at 7.732 percent.
10-year government securities yield

Source: Bloomberg