HDFC and Bajaj Finance up rates on term deposits ahead of Reserve Bank of India meet. India’s largest home loan lender, HDFC Ltd, up rates to 15 bps.
In a move that could carry some relief to customers, two of the biggest non-banking loan specialists, HDFC Ltd and Bajaj Finance, have climbed their term deposit interest rates in front of the RBI’s MPC meeting, expecting that the rate cycle might be changing.
India’s biggest home loan lender, HDFC Ltd, raised its interest rates by up to 15 bps. It is currently offering a yearly return of 6.25 percent on a 33-month store of up to Rs 2 crore. Likewise, Rs 2 crore deposit will bring a yearly return of 6.7 percent for a time of 66 months, and 6.8 percent for a time of 99 months.
These rates are applicable with immediate effect i.e., December 1. In addition, Senior citizens (60 years+ of age) will be qualified for an extra 0.25 percent for each annum up to Rs 2 crore deposits as before, and these do not apply to recurring deposits.
Also, India’s biggest consumer lender, Bajaj Finance, has raised interest rates to 30 bps on tenure 24 – 35 months and 36 – 60 months long-term deposits. There is no adjustment of the yearly returns for the period 12 – 23 months. As per the amended returns, the lender is offering a 6.4 percent deposit up to Rs 5 crore for a tenure of 24 – 35 months and 6.8 percent for a time of 36 – 60 months.
With the benchmark interest rates at their lowest level on account of the Coronavirus (Covid-19) pandemic, customers have needed to endure the worst part of low profits from their deposits to such an extent that many savers have gotten away saving from term deposit to systematic investment plans (SIP) offered by mutual funds (MF) and insurance agencies guaranteed insurance plans.
RBI’s repo rate as of now remains at 4%. With the super free financial policy concluding, the rate cycle might turn as soon as possible and this would mean the lending cost for some would rise.