Individuals, who put money for tenures of 33, 36-40 and 44 months will now earn 6.75%, 7% and 7.20%, respectively. Senior citizens can earn 25 basis points higher than this, taking the rates to 7.45% for a 44-month period.
Investment advisors said investors would do well by spreading out their deposits over the next few months to make the best of these rate hikes.
“Rates are likely to increase further, but it is not possible to time the peak (of interest rates),” says Vidya Bala, founding partner, Prime Investor. She said investors could put money into long-tenure deposits in three tranches over the next few months.
The increase in deposit rates has come on the heels of the Reserve
‘s surprise move to increase key policy rates. As inflationary pressures accelerate, market participants are expecting more monetary tightening by the central bank, which will likely push finance companies and banks to raise money through deposits.
Finance companies’ deposits usually offer 100-150 basis points more than bank deposits. While a deposit at
pays a maximum of 5.6%, investors can earn 7.2% in a corporate fixed deposit.