Punjab National Bank (PNB) has once again revised fixed deposit (FD) interest rates for amounts below ₹2 crore, marking the second such hike within a span of 10 days. The bank had previously revised rates with effect from January 1 and has now implemented further changes, effective from January 8.
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During the latest adjustment, the public sector lender raised interest rates by a 80 basis points (bps) on a single tenure.
On deposits maturing in 300 days, the bank has hiked rates from 6.25% to 7.05%.
On January 1, PNB had increased rates by up to 45 bps on certain tenures while simultaneously reducing rates on others.
Following the recent revision, PNB now offers general citizens interest rates ranging from 3.5% to 7.25% on deposits maturing in 7 days to ten years.
Here are the revised FD interest rates offered by PNB:
| Period | Interest rates for general citizens | Interest rates for senior citizens |
| 7 to 14 Days | 3.5% | 4% |
| 15 to 29 Days | 3.5% | 4% |
| 30 to 45 Days | 3.5% | 4% |
| 46 to 60 Days | 4.5% | 5% |
| 61 to 90 Days | 4.5% | 5% |
| 91 to 179 Days | 4.5% | 5% |
| 180 to 270 Days | 6% | 6.5% |
| 271 Days to 299 Days | 6.25% | 6.75% |
| 300 Days | 7.05% | 7.55% |
| 301 Days to < 1 Year | 6.25% | 6.75% |
| 1 Year | 6.75% | 7.25% |
| >1 Year to 399 days | 6.8% | 7.3% |
| 400 Days | 7.25% | 7.75% |
| 401 Days to 2 Years | 6.8% | 7.3% |
| above 2 years and up to 3 years | 7% | 7.5% |
| above 3 years and up to 5 years | 6.5% | 7% |
| above 5 years and up to 10 years | 6.5% | 7.3% |
(Source: PNB website)
This development possibly comes against the backdrop of comments made by Reserve Bank of India's Governor Shaktikanta Das during the October 2023 policy announcement.
In October 2023, Das highlighted a repo rate increase of 250 basis points, emphasising that this upward adjustment had not been entirely transmitted to bank deposit rates at that time.
The relationship between the repo rate and fixed deposit interest rates has been evident in recent months.
As the RBI increased the repo rate, banks gradually adjusted their FD interest rates, albeit with some delay in transmission.
Banks that initially deferred raising their FD rates have since been playing catch-up with the RBI's policy actions.
It is noteworthy that the RBI has maintained the repo rate at 6.5% for five consecutive times, following a pause in April 2023. Prior to this pause, the central bank had implemented six consecutive rate hikes, amounting to a total increase of 250 basis points.
First Published: Jan 11, 2024 4:43 PM IST
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