ICICI Bank hikes interest rates on fixed deposits again

Private lender ICICI Bank on Wednesday raised interest rates on fixed deposits (FDs) for the second time in a month. The bank had earlier hiked interest rates on FDs on June 16.

The lender has hiked interest rates on term deposits of less than ₹2 crore with effect from June 22.

For FDs maturing in 185 days to less than 1 year, the interest rate has been hiked by 5 basis points to 4.65%, compared with 4.60% earlier.

Deposits with maturity period ranging from one year to two years will fetch 5.35% interest as against 5.30% earlier, up 5 basis points. This is on par with the interest rate offered by India's largest lender, HDFC Bank, on fixed deposits of similar tenure.

ICICI Bank offers 2.75% interest on FDs maturing in 7 to 29 days, and 3.25% interest rate on FDs maturing in 30 to 90 days. The interest rate is 3.75% for FDs maturing in 91 days to 184 days.

FDs with a maturity period of two years and one day to three years will get customers 5.50% interest. Deposits having maturity period over three years and up to five years will attract 5.70% interest. Fixed deposits maturing in five years and one day to 10 years will fetch the same 5.75% interest.

The five-year tax saving fixed deposit which offers tax benefit under Section 80C of the Income Tax Act will now fetch 5.70% interest.

ICICI Bank offers 0.50% higher interest rates to senior citizen customers compared with non-seniors. The bank is also running a "Golden Years FD Rates" scheme for resident senior citizens. As part of the scheme, such customers will get an additional interest rate of 0.25% per annum for limited time over and above the existing additional rate of 0.50% per annum. The additional rate will be available on fresh deposits opened as well as deposits renewed during the scheme period, the lender says. The scheme is eligible for FDs having tenure above five years.

ICICI Bank employees (including retired staff) get an additional 1% rate of interest on domestic deposit below ₹2 crore.

The rate hike comes days after HDFC Bank raised interest rates on fixed deposits of less than ₹2 crore on June 17. India's largest state-run lender State Bank of India (SBI) too hiked interest rates on fixed deposits less than ₹2 crore on June 14.

For deposits maturing in 211 days to less than 1 year, SBI has hiked the interest rate by 20 basis points from 4.40% to 4.60%. On term deposits of 1 year to less than 2 years, SBI now offers an interest rate of 5.30% up from 5.10% earlier. Deposits maturing in two to three years will now fetch 5.35% interest, up from 5.20% previously.