While the Reserve Bank of India (RBI) kept the Repo rate unchanged at 6.50 per cent for the 11th time in its bi-monthly monetary policy committee (MPC) meeting in December 2024, five banks, including Canara Bank, Karnataka Bank, Equitas Small Finance Bank (SFB), Jana SFB, and Capital SFB revised their FD rates this week.
Amid expectations of a rate cut, RBI revised its GDP growth projection downward from 7.2 per cent to 6.6 per cent and inflation projection upward from 4.5 per cent to 4.8 per cent for the financial year 2024-25, considering high inflation, lower GDP projection, and weakening rupee.
Now, several experts expect the rate cut will likely be at the next MPC meeting in February 2025.
Manish Jain, director, Institutional Business (Equity and FI) Division, Mirae Asset Capital Markets, refers to the cash reserve ratio (CRR) cut by 50 basis points to 4.0 per cent. He says, “CRR cut helps in boosting liquidity. With this liquidity, banks don't have to chase deposits at higher rates. Rate cut expectation shifts to February; Nov and Dec's data are key now”.
Suresh Darak, founder, Bondbazaar, says, “Going ahead, if inflation cools down, we may see a rate cut early next year to prop up the economy and boost GDP growth.''
Murthy Nagarajan, head, Fixed Income, Tata Asset Management, opines, “RBI may have to cut more than 50 basis points in the coming months as the rate cut cycle is getting delayed and GDP growth is trending towards 6 per cent levels. Investors should add to their duration portfolio to take advantage of high accrual and expected price appreciation in the coming months”.
Also Read: UPI Credit Line To Be Available In Small Finance Banks: RBI MPC
So, if one wants to add fixed-income instruments, one may consider fixed deposits (FD) with the banks. Here are the details of interest rate revisions that occurred during the week ending December 7, 2024, for FDs of less than Rs 3 crore.
Canara Bank:
The bank revised its FD rates on December 1, 2024. It offers 0.50 per cent additional interest to senior citizens on FDs of 180 days and above, and the highest rate available to seniors at present is 7.90 per cent. It offers seniors:
6.65 per cent for 180 days to 269 days
6.75 per cent for 270 days to less than 1 year
7.35 per cent for 1 year
7.75 per cent for 444 days (7.85 per cent for super seniors)
7.35 per cent for above 1 year to less than 2 years
7.80 per cent for 2 years and above to less than 3 years
7.90 per cent for 3 years and above to less than 5 years
7.20 per cent for 5 years and above to 10 years.
Karnataka Bank:
The bank offers a maximum of 8.00 per cent to seniors. The bank offers resident senior citizens an extra 0.25 per cent above general public rates under domestic FD only for FD tenures less than one year and an additional 0.50 per cent above the general rate for tenures 1 year to 10 years. Here are the rates for seniors:
6.50 per cent for 180 days to below 1 year
7.75 per cent for 1 year to 2 years
8.00 per cent for 375 days
7.00 per cent for Above 2 years to 5 years
6.30 per cent for Above 5 years to 10 years.
It revised the rates on December 2, 2024.
Also Read: RBI Enhances UPI Lite Transaction Limits: Rs 1,000 Per Transaction And Rs 5,000 Per Day
Equitas Small Finance Bank:
The small finance bank (SFB) revised its FD rates on December 2, 2024. The highest rate available to senior citizens is 8.60 per cent for 12 to 18 months. Other tenure rates for seniors are:
8.60 per cent for 12 months to 18 months
8.25 per cent for 21 months to 24 months
8.50 per cent for 30 months to 36 months
8.00 per cent for 48 months
7.75 per cent for 60 months to 120 months.
Jana Small Finance Bank:
The bank offers interest rates on FDs in two categories: less than Rs 10 lakh and equal to or more than Rs 10 lakh. The rate for senior citizens is 8.75 per cent in both these categories. Here are the interest rate details:
FDs less than Rs 10 lakh:
8.00 per cent for 181 days to 364 days
8.75 per cent for 365 days to 483 days
8.25 per cent for 484 days
8.75 per cent for 485 days to 3 years (1095 days)
7.75 per cent for more than 3 years to less than 5 years
8.20 per cent for 5 years (1825 days)
7.00 per cent for more than 5 years to 10 years.
FDs equal to or more than Rs 10 lakh:
8.00 per cent for 181 days to 364 days
8.75 per cent for 365 days to 483 days
8.35 per cent for 484 days
8.75 per cent for 485 days to 3 years (1095 days)
7.75 per cent for more than 3 years to less than 5 years
8.20 per cent for 5 years (1825 days)
7.00 per cent for more than 5 years to 10 years
The rates were revised on December 6, 2024.
Capital Small Finance Bank:
Seniors can avail of a maximum of 8.10 per cent with the bank. The bank revised FD rates on December 3, 2024. It offers:
6.00 per cent for 180 days to less than 1 year
7.65 per cent for 1 year to less than 5 years
7.60 per cent for 5 years and up to 10 years
Special FDs:
8.05 per cent for 12 months
8.10 per cent for 400 days
7.90 per cent for 600 days
7.80 per cent for 900 days.
