Fixed deposit interest rates: Interest rates on fixed deposits have scaled new highs over the past two years as banks have increased rates after the Reserve Bank of India’s hike in key policy rates. However, over the past couple of months, banks have gone slow in FD rate hikes. Some banks have even reduced the FD rates for their depositors. Punjab National Bank and Axis Bank have reduced interest rates on fixed deposits on select tenure.
Punjab National Bank
Punjab National Bank (PNB) is the first public sector bank to revise its interest rates on fixed deposits of less than Rs 2 crore. As of now, the lender has reduced fixed deposit interest rates on single tenure. According to the bank’s website, the new rates are effective from June 1, 2023. The bank has cut the interest rate on one-year deposits by 5 basis points (bps). The fixed deposit schemes will now fetch an interest rate of 6.75 per cent in place of 6.80 per cent.
Last month, the bank decreased the interest rate on FDs maturing in 666 days to 7.05 per cent from 7.25 per cent.
There is good news for senior citizens. PNB has slashed the interest rate by 5 bps on deposits maturing in 1 year to 7.25 per cent from 7.30 per cent.
The bank reduced the deposit rate in May on FDs maturing in 666 days to 7.55 per cent from 7.75 per cent for senior citizens.
For the schemes for super senior citizens, the bank has slashed the interest rate by 5 bps on deposits maturing in 1 year to 7.55 per cent from 7.60 per cent.
Axis Bank FD rates
Axis Bank has reduced its fixed deposit interest rate on select tenures by up to 20 basis points. The FD interest rates are effective from May 18, 2023.
According to the bank’s website, the bank is offering an interest rate of 6.80 per cent from earlier 7.10 per cent for the schemes of 1 year 5 days to less than 13 months. On deposits of 13 months and less than two years, the bank will offer 7.10 per cent from earlier 7.15 per cent.
FD rates may further
Experts feel that current macroeconomic indicators show that FD interest rates are nearing their peak in the current cycle of interest rate hikes. Due to this, overall interest rates may see some reduction in short- to medium-term deposits. A report from Axis AMC stated: “Rates for the short end of the curve up to 3 years can fall by 20-30 bps as, along with this liquidity surplus, we are also near to the peak of interest rate cycle and can expect cuts in last quarter of this FY.”
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