highlights
Interest rates on small savings plans rose three times in a row
The repo rate went from 4% to 6.50% in about a year
6.9% yield on 2 year TD at post office
New Delhi. Due to the 3-fold increase in interest rates for small savings plans, post-term deposits once again found themselves in competition with bank FDs. Under small savings plans, the Post earns 6.9 percent interest on 2-year term deposits, which is the rate most banks are offering for deposits with the same maturity.
The Reserve Bank began raising the repo rate in May 2022 and it has since risen from 4 percent to 6.50 percent. As a result, in the second half of last fiscal year, banks began paying more interest on retail deposits in order to raise more funding. As a result, the weighted average domestic term deposit rate (WADTDR) from May 2022 to February 2023 on new bank deposits increased by 2.22 percent.
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In the first half of the year, banks tended to focus more on retail deposits.
At the same time, the focus of banks was more on retail deposits in the first half of the 2022/23 financial year. But in the second half his priority changed and he focused more on raising retail deposits. Raising interest rates was part of that.
The government decides the interest rates for small savings plans
The government increased interest rates on small savings plans by 0.1-0.3 percent for the October-December quarter, by 0.2-1.1 percent for the January-March quarter and by 0 percent for the April-June 2023 quarter. 1-0.7 percent. Previously, interest rates on small savings plans had been flat for 9 consecutive quarters. These have not increased from the second quarter of the 2020/21 financial year to the second quarter of 2022/23. The government decides the interest rates for small savings plans.
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The Reserve Bank said banks’ term deposit rates are now competitively priced relative to Post Office term deposit rates. According to the Reserve Bank, the WADTDR on retail deposits from banks with a maturity of 1 to 2 years increased to 6.9 percent in February 2023, from 5.8 percent in September 2022 and 5.2 percent in March 2022.
6.9 percent return on 2 year TD in the post
After the interest rate for small savings investments was raised three times in a row, the Post Office’s two-year term deposit is now yielding a return of 6.9 percent. This rate was 5.5 percent in September 2022.
FD sets from SBI
The country’s largest bank, SBI, pays 6.8 percent interest on deposits over a year and under two years. At the same time, SBI’s interest rate for deposits of more than two years and less than three years is seven percent. Banks have increased their EBLR by up to 2.50 per cent over the period May 2022 to March 2023 in line with the increase in the repo rate. The internal standard for credit pricing, MCLR, rose by 1.40 percent.
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Tags: Bank FD, FD prices, India Post, post
FIRST RELEASED : April 09, 2023 at 19:03 CET
