Interest rates

SBI, HDFC Bank and others raise fixed deposit interest rates: good time to invest?

Fixed deposit (FD) interest rates have come down significantly over the past three years. Currently, the repo rate is at an all-time low of 4%, which has not changed since May 2020. Fortunately, there have been recent small hikes in FD rates from some financial institutions, including national banks like the State Bank of India. and HDFCs. This portends a trough in rates and investors need to prepare their strategy to make the most of it.

Rising FD rates: 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 fallen from 6.46% on January 3, 2022 to 6, 74% on January 27, 2022, in less than a month.

As a result, banks raised interest rates on fixed deposits (FD). This is good news for FD investors who have been locked in by low interest rates for a decade as banks have cut rates relentlessly over the past two years.

Over the past two weeks, various banks such as HDFC Bank, State Bank of India (SBI), IndusInd Bank, IDBI Bank, etc. increased interest rates on various FD mandates. Others too may soon follow suit.

National Bank of India

The State Bank of India (SBI) has raised interest rates on time deposits for tenors over 2 years. Interest rates on time deposits with a duration of 2 to 3 years were raised to 5.20% against 5.10% previously. Meanwhile, rates on the term of 2-5 year fixed deposits were raised by 15 basis points to 5.45%. For term deposits with a duration of 5 to 10 years, the interest rates were raised to 5.50%. The revised interest rates will apply from February 15, 2022.


HDFC Bank raised the interest rate on one-year term deposits by 10 basis points to 5%. Rates on deposits with a maturity of 3 to 5 years were raised by 5 basis points to 5.45%. The revised FD interest rates are applicable from February 14, 2022.

IndusInd Bank

IndusInd Bank has raised interest rates on various terms by 25 basis points, effective February 16, 2022. The bank has revised interest for terms up to 180 days.

The bank offers an interest rate of 2.75% on fixed deposits due in 7-14 days to the general public for amounts below Rs 2 crore. IndusInd Bank now offers a rate of 3.00% on term deposits with maturities between 15 and 30 days. Bank customers will now benefit from interest rates of 3.25% and 3.50% on term deposits maturing between 31 and 45 days and between 46 and 60 days, respectively. On deposits expiring in 61 days to 90 days and 91 days to 120 days, non-senior citizens will now enjoy interest rates of 3.75% and 4.00%, respectively.


IDBI Bank, a private sector lender, raised interest rates on long-term deposits by 25 basis points and kept interest rates on other maturities unchanged.

federal bank

Fixed Deposits (FD) are offered by the Federal Bank at interest rates ranging from 2.50% per annum to 5.60% per annum. The duration of an FD account can range from seven days to ten years. Seniors are entitled to a higher interest rate. The bank has revised the interest rates and the new rates are effective from 17-02-2022.

What should investors do now?

If you are considering opening a new FD or renewing a current FD, you should choose a shorter term deposit, such as one year or less, so that your money is not tied to a low rate for too long. When short-term and medium-term rates rise, you can begin to lengthen the duration of your FDs.

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