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Home >Money >Personal Finance >HDFC hikes fixed deposit rates by up to 25 bps from 30 March

Mortgage lender HDFC Ltd has increased rates on its AAA-rated fixed deposits (FDs) with maturity between of 33 and 99 months by 25 basis points, effective 30 March. One basis point is 0.01%.

The 33-month fixed deposit will now fetch 6.2% annualized returns, while the 66- and 99-month FDs will give annual returns of 6.5% and 6.65%, respectively. Senior citizens will get 25 bps additional interest over the prevailing rates.

Anil Chopra, Group Director - Financial Wellbeing, Bajaj Capital said, "The interest rate offered on the deposits is well-above the competitive investment options." There are various tenure options from 12 months to 120 months to choose from based on one's requirement. Further, depending on the need there are various payment options to choose from like monthly, quarterly, half-yearly or yearly.

Company deposits that come with the highest ratings and from reputable and established groups may be considered by investors keeping their own risk profile in context. It is better to divide the investment amount across 2-3 such highly rated deposits and then invest for the medium-term horizon. Your total exposure to company deposits should be within a reasonable level of your total investible corpus," said Chopra.

HDFC has AAA rating from both Crisil and ICRA for 25 consecutive years. “These FD investments are meant for conservative investors who do not want to take risk and are fine with it being taxed," said Mrin Agarwal, director, FinSafe.in, a finance education company.

According to financial planners, a common approach that investors must follow while investing in any debt products is to prioritize safety over liquidity and returns.

Nishith Baldevdas, founder, Shree Financial, a Securities and Exchange Board of India-registered investment advisor, said that investors who want some debt exposure just for returns can invest in such type of FDs. “It is also pertinent to note that investors should not compare such FDs with bank fixed deposits. These top-rated FDs don’t provide much liquidity when it comes to premature closure," he added.

Meanwhile, the Centre withdrew its previous order on interest rate cuts on small saving schemes on Thursday.

(Do you have a personal finance query? Send in your queries at mintmoney@livemint.com and get them answered by industry experts)

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