Kotak Mahindra Bank Ltd. on Thursday announced an increase in interest rates on fixed deposit across multiple tenor baskets for its retail customers by up to 0.35%.
The increase in FD rates comes after the Reserve Bank of India announced a 40 basis points hike in the repo rate, Kotak said in a release.
Reserve Bank of India in a surprise, out of turn move, on Wednesday hiked the benchmark repo rate -- at which it lends short term money to banks -- by 0.40% to 4.40% in order to contain inflation in the wake of the rising global commodities prices fuelled by the Russia-Ukraine war.
"The increase is effective from 6th May on all deposits below Rs 2 crore," the private sector lender said.
For deposits of 390 days, the new rate of interest will be 5.50%, up by 0.30%.
On funds deposited for 23 months, customers will get a savings rate of 5.60%, up by 0.35%, the bank said, adding that it will offer savings rate of 6.10% for 23 months and above tenor deposits to senior citizens.
Virat Diwanji, Group President – Retail Liabilities & Branch Banking, Kotak Mahindra Bank, said: "This fixed deposit rate increase is a golden opportunity being unleashed after nearly two years of low interest rate scenario in the economy. We are among the first banks to announce this hike." This is the apt time for consumers to save for their cherished goals and enjoy increased returns on their savings, he said.
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