On Tuesday, Bajaj Finance raised interest rates too by up to 10bps on its fixed deposits for up to Rs 5 crore for tenors ranging from three to five years. Following the increase, deposits between three to five years will get a return of 7%. Shorter-term deposits below 23 months would continue to receive 5.7%, and deposits between 24 and 35 months will earn a return of 6.4%.
In HDFC’s case, this is the second time the housing finance company has tweaked its deposit rates in recent days. Earlier, HDFC had reduced short-term rates and hiked returns on longer-term deposits. Some analysts feel that the corporation may increase deposit mobilisation in the run-up to the merger with HDFC Bank as banks have to maintain a larger proportion of their funds in liquid assets.
SBI, the country’s largest bank, has also revised deposit rates. But the changes apply only to bulk deposits above Rs 2 crore. The highest increase has been on bulk deposits with maturities of over three years, where the bank is offering 90bps more than what was available earlier. Deposits from three to 10 years now earn interest at 4.5% as compared to 3.6%.
According to an analyst, the real interest rates (after adjusting for inflation) on short-term deposits continue to be negative even after recent revisions. This is because the banking system is flush with surplus liquidity.