Banks are now offering a better deal for depositors, the rate of interest for short term deposits have gone up, for the deposits whose maturity date is below a year, this is to help the base of retail deposits as well as meet the increasing demand for the growth of strong credit.
Since a couple of days, Banks like Axis Bank, Allahabad Bank, oriental Bank of Commerce, Punjab National Bank, Canara Bank, Union Bank of India and State Bank of India have hiked the rates for fixed deposits. The interest rates for fixed deposits between Rs. 1 crore and Rs, 10 crore, whose maturity date is anywhere between 180-270 days, has gone down from 8.25 percent to 8 percent.
The RBI, in the recent review of the monetary policy which was on October 29, decided to increase the repo rate by 25 basis point to 7.5 percent. However, the marginal standing facility has reduced to 8.75 percent, a reduction of 25 basis points.