Several major banks in India have increased their fixed deposit (FD) interest rates as changing liquidity conditions put pressure on the banking sector. HDFC Bank, Punjab National Bank, Canara Bank and Bank of India are among the lenders that have recently revised their deposit rates.
Why Are Banks Increasing FD Rates?
The banking system has experienced a decline in surplus liquidity, making it more important for banks to attract fresh deposits. Strong credit demand and the Reserve Bank of India’s liquidity management measures have also contributed to the changing situation.
Banking system liquidity averaged around ₹1.28 lakh crore over the last two weeks, compared with ₹2.39 lakh crore in October and ₹7.77 lakh crore in September.
Revised FD Rates Across Major Banks
Canara Bank has increased rates on selected tenures, offering 6.40% for deposits between one year and 15 months, 6.65% for 444 days and 6.75% for 555 days.
HDFC Bank has also raised rates on selected deposit periods, while Punjab National Bank has increased rates by 10–50 basis points on certain special tenures.
What Does This Mean for Depositors?
The latest revisions give depositors more opportunities to compare interest rates across banks. However, FD returns depend on the deposit period, customer category and applicable bank conditions.
Banks may continue adjusting their deposit rates depending on liquidity requirements, credit growth and future RBI policy decisions.
