Why rising interest rates don't make FDs attractive
- Rates offered by banks on fixed deposits are inching up but several factors make FDs less attractive
With the Reserve Bank of India (RBI) raising the repo rate by 1.40 percentage points over three policy reviews, interest rates on fixed deposits (FDs) have inched up in the last few months. The rates of 3-year and 5-year tenure FDs offered by major banks like ICICI, HDFC and SBI are in the range of 5.5-6.1%, up from 5-5.3% before the rate hikes. Rates offered by small banks and non-bank finance companies (NBFCs) are higher at 6.65-7.95%. Senior citizens get an even sweeter deal in the form of an additional 0.25%-0.5% interest.