Now more interest on FD the effect of reducing deposits and increasing demand for loans

Interest on FD: If you are planning to make Fixed Deposit (FD), then there is good news for you. Banks have hiked interest rates on deposits in the past few months but experts say

rising credit demand and liquidity crunch may compel them to hike rates further by at least half a per cent to 0.75 per cent. Public sector Indian Overseas Bank (IOB) has also

started this. IOB has said that it will hike interest rates on its retail fixed deposits by up to 0.60 per cent from November 10. Experts say liquidity crunch and 18 per cent

growth in credit to a decade-high and low deposits are forcing banks to raise FD rates. At present, some public and private sector banks are giving interest up to 7.50 percent on

FDs to general account holders. While offering higher interest up to eight per cent to senior citizens. Private sector HDFC is also offering 7.5 per cent interest on special

deposits. Between June and October, SBI hiked in the range of two to three years. However, during the last week, some state-owned banks announced a hike in interest rates on

special deposit schemes, taking their interest rates up to 7.4 per cent. Lower growth on deposits than on loans The Reserve Bank has increased the repo rate by up to

1.90 per cent since May this year. Banks have increased the interest rates on loans according to the repo rate. But interest rates on deposits have increased by an average of 0.35

per cent. In such a situation, banks can sharply increase the interest rates on deposits in view of the demand for loans. Decreasing cash with banks According to a

report by SBI, an average of Rs 8.3 lakh crore cash was injected into banks in April 2022 on a net basis. It has now come down by about one-third to Rs 3 lakh crore. In such a

situation, banks need huge cash to give loans to customers. Experts say that in this situation, banks have no option but to increase interest rates on deposits. Bank of Maharashtra

made loans expensive Public sector Bank of Maharashtra (BoM) has increased the marginal cost of funds based interest rate (MCLR) for select term loans. The bank told the

stock exchanges on Wednesday that the one-year MCLR has been increased from 7.80 percent to 7.90 percent. The same interest is levied on consumer loans such as vehicle, personal

and home loans. According to the bank, the revised MCLR has come into effect from November 7, 2022. At the same time, the one-month tenor MCLR has been increased by 0.05 points to

7.50 percent. Apart from this, there has been no change in the interest rates for loans of one day tenor and three and six months. IOB will pay 0.60 percent higher interest on FD