Due to after effects of pandemic and Russia-Ukraine war, the world is facing inflation. In other words, the purchasing power or the value of currencies are falling. India is also not unaffected by this and the retail inflation in India is about 7 percent. Due to such high inflation rates, people are losing faith in safe investment options like fixed deposits, which usually offers interest between 5 and 6 percent.
To combat persistent inflation, the central bank has been raising interest rates. The Reserve Bank of India increased repo rates by 140 basis points during the past few months, some banks increased interest rates. When the RBI lends money to commercial banks, those banks in turn charge borrowers higher rates, allowing the RBI to profit. This is known as the repo rate.
For depositors, rising rates and a potential drop in inflation are welcome news. With better deposit rates and slow inflation growth the fixed deposits are once again becoming relevant. Here in this article, we are sharing some inflation beating fixed deposits.
AU Small Finance Bank
AU Small Finance Bank has increased the interest rate on fixed deposits (FDs). From the previous benchmark of 6.9 percent to 7.5 percent for ordinary customers and 7.4 percent to 8 percent for senior citizens, the bank has raised the FD rates for retail deposits, an increase of up to 60 basis points.
The new interest rates came into effect on October 10, 2022. Customers of AU Bank, particularly senior citizens, have the opportunity to earn returns on their fixed deposits that outperform inflation.
Yes Bank is accepting a minimum deposit of 10,000 as a fixed deposit. On FDs between 10,000 and less than 5 crore, the bank is providing yields that above inflation. With effect from October 1, Yes Bank offers a 1.10% to 1.60% mark-up rate on tenues from one year to less than three years on FDs between 10,000 and less than 5 crore.
It should be noted that the mark-up rate is the additional interest rate that the bank offers over and above the base rate, which in this case is the REPO rate. In light of this, Yes Bank is providing a 7.50% interest rate on the FDs with a maturity of 18 months to under 3 years that are stated. The rate is fixed at 7% for tenures of one year to less than eighteen months.
Private sector lender RBL Bank has altered the interest rates on fixed deposits under Rs. 2 crore. The new rates came into effect on October 1, 2022, according to the bank’s official website. RBL Bank increased its interest rate as a result of the RBI repo rate hike. For deposits maturing in 725 days, RBL Bank will now offer a maximum interest rate that is greater than the 7% retail inflation rate calculated by the Consumer Price Index (CPI).
RBL Bank will now offer an interest rate of 6.50% on retail term deposits maturing in 365 to 452 days. Fixed deposits with maturities between 460 and 724 days (15 months, 1 day, and less than 725 days) will now earn interest at a maximum rate of 7.00%, while term deposits with maturities between 725 days and 460 days will now earn interest at a maximum rate of 7.25%.
Shriram Transport Finance Company
Interest rates on fixed deposits been increased by Shriram Transport Finance Company. According to the company’s official statement, the new pricing are in effect. Following the modification, the company increased interest rates across a range of tenures by 5 to 25 basis points (0.05%p.a. to 0.25%p.a.). The company has also implemented a special benefit for women, paying an extra 10bps per year on all FD rates to female depositors. The general public will now receive returns on their deposits of up to 8.30%, while senior citizens will receive returns of up to 8.90% as a result of the interest rate increase.
IDFC First Bank
The interest rates on fixed deposits have been increased by IDFC First Bank, a private bank with headquarters in Mumbai, from 2 crore to 25 crore. As of September 19, the revised rates are in effect. Since the bank provides an incentive of an additional spread of 0.5% on these FDs, senior persons are the main winners. The highest rate, which is available for tenures of more than one year to two years, is 7.10%. This rate outpaces inflation.
With effect from September 26, Bandhan Bank revised the interest rates on large fixed deposits (FDs). The FDs start at 2 crore and go above that. The interest rate on FDs with a premature payment facility is the highest at 7.25%, while the rate without the premature withdrawal facility is quite high at 7.80%. The interest rates on bulk deposits offered by Bandhan Bank exceed inflation.