ICICI Bank, the second biggest private lending institution in India, has officially confirmed an increase in the retail term deposit interest rates. These will go up by around 0.25% for select maturities.
The interest rates are already rising throughout the entire system amidst a scenario where there is a tightening of overall liquidity and two successive hikes in rates by the Reserve Bank of India and also where several financial institutions are announcing reviews of rates. Increases in the deposit rates usually spark similar increases in lending rates as per studies.
ICICI Bank has stated that there is volatility present in the current financial market and this will lead to more customers preferring to invest in safer avenues such as FDs (Fixed Deposits). This hike in retail term deposits will thus be a good move from the bank at this point of time. 7.50% will be the interest rate for deposits lower than Rs. 1 crore for tenors above 2 years and up to 3 years. This indicates an increase of 0.25% as per reports.
The rates have come into effect from the 15th of November, 2018, onwards. The bank has also increased rates by 0.25% in other categories such as 61-90 days, 46-60 days, 121-184 days and 91-120 days. Rates have been increased by 0.15% for the category of 1 year to 389 days. Deposits for 390 days to 2 years will have interest rate hikes of 0.10% as per reports.