In a recent announcement, Kotak Mahindra Bank has unveiled an increase in interest rates on Fixed Deposits (FDs) of less than ₹2 crore, offering senior citizens an opportunity to enjoy enhanced returns. The bank has raised rates by up to 85 basis points (bps) across various tenures, providing a lucrative investment option for both senior citizens and regular customers.
For tenures ranging from 23 months to 2 years, senior citizens can now earn up to 7.80%, showcasing a substantial hike in returns. This upward revision extends to tenures of 2 to 3 years, offering senior citizens a competitive rate of 7.65%. Regular customers investing less than ₹2 crore also benefit from a 50 bps increase for FDs with tenures of 3 to 4 years, now providing an attractive rate of 7.00%.
Furthermore, tenures of 4 to 5 years witness a remarkable hike to 7.00%, up from the earlier 6.25%, providing investors with an even more enticing proposition. Kotak Mahindra Bank’s strategic move aims to offer customers competitive returns on their fixed deposits.
The timing of this rate hike follows the recent decision by the Reserve Bank of India (RBI) Governor Shaktikanta Das-led monetary policy committee (MPC) to keep the repo rate unchanged at 6.5%. This decision, made on Friday, December 8, 2023, marked the fifth consecutive time the repo rate remained steady.
It’s worth noting that the RBI had implemented six consecutive rate hikes, totaling 250 basis points, until the pause in April. Despite the rise in repo rates, the adjustment in bank deposit rates has been gradual, as indicated by RBI Governor Shaktikanta Das in the October policy review. Banks initially lagged in increasing their FD rates following the RBI’s policy actions, leading to a subsequent catch-up phase.
Kotak Mahindra Bank’s proactive approach to raising FD rates underscores its commitment to providing competitive and attractive investment opportunities for both senior citizens and regular customers. This move is likely to stimulate interest in fixed deposits, offering investors a chance to capitalize on higher returns amid the evolving economic landscape.
