Fixed deposit rates: In a surprising turn of events, the Reserve Bank's decision to increase interest rates has caused a ripple effect on various financial fronts. Notably, the interest rates for bank schemes, including fixed deposits, have witnessed significant fluctuations. While the rates soared for a considerable period, certain banks have recently implemented cuts to their fixed deposit interest rates.
Let's take a look into the specifics of these rate cuts, starting with Punjab National Bank, Axis Bank, and Union Bank of India. Punjab National Bank has initiated a reduction in interest rates for single tenures as of June 1. This adjustment primarily affects deposits under 2 crores. For instance, the interest rate on one-year tenure fixed deposits has decreased from 6.75% to 6.5% for regular citizens. Similarly, the interest rate for the 666-day tenure has declined from 7.25% to 7.05%.
Moving on to Axis Bank, they have recently decreased the interest rate on single tenures of fixed deposits by 20 basis points. Following this update, fixed deposits with tenures ranging from 7 days to 10 years offer interest rates ranging from 3.5% to 7.10%. Additionally, the bank has reduced interest rates from 7.10% to 6.80% for tenures of fewer than five days to 13 months. Similarly, for tenures between 13 months and less than 3 years, the interest rate has been lowered from 7.15% to 7.10%. These revised rates became effective on May 18, 2023.
Lastly, the Union Bank of India. In November 2022, this bank boasted the highest interest rates, standing at 7.30% for the General Public, 7.80% for Senior Citizens, and 8.05% for Super Seniors. However, their current rates, as stated on their website, reflect a decline. Regular citizens can expect an interest rate of 7%, while senior citizens receive 7.50%, and super senior citizens receive 7.75%.
If you intend to invest in fixed deposit schemes within the affected banks and specific tenures mentioned, the interest returns will be lower compared to earlier rates. However, for tenures outside these mentioned periods, the interest rates will remain in accordance with the previous updates. It's crucial to consider these changes while planning your investments.
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