Karnataka Bank Increases Interest Rate On Domestic, NRE Rupee Deposits: Check New Rates

Through the exchange filing, the private sector lender Karnataka Bank informed about the hike in interest rates of its domestic as well as NRE rupee term deposits. The change in rates has been implemented for deposits below Rs. 2 crore. NRE rupee deposits are primarily term deposit accounts held to transfer foreign earnings.

Likewise, on the interest rate hike, the bank in the filing said, the rate increase is as following- "10 bps increase for 1 to 2 years period deposits as well as above 2 years to 5 years deposits. Accordingly, the rate of interest for 1-2 years deposits will be 5.35 % p.a. and above 2 years to 5 years the rate will be 5.50 % p.a. The above rates are effective from July 01, 2022. The upward revision in the deposit interest rate will encourage retail customers to invest more in various term deposit schemes of the Bank".

Note 10 bps is 0.1% as 1 bps is one-hundredth of a percentage point.

So, with effect from July 1, 2022, general public for a tenure of 1-2 years will now get 5.35% interest as against the current 5.25%. Likewise, for tenure above 2 years to 5 years, the interest rate stands revised to 5.5% from the current 5.4%.

For other tenures, the rate remains unchanged and is specified below in the table:

Currently, the bank offers a 5.65% interest rate to senior citizens on deposits below ₹2 crore for a 1-2 years maturity period. The rate is 5.80% on above 2 years to 5 years tenure, and 6% on above 5 years to 10 years tenure.

Meanwhile, in the case of NRE Rupee Term Deposits below ₹2 crore, the interest rate will increase to 5.35% on 1-2 years tenure, and 5.5% on above 2-5 years tenure.

Note senior citizens who keep their deposits with Karnataka Bank fetch 0.4% higher returns than other depositors for tenure of 1-5 years and for a higher tenure over 5 years, they are entitled to get 0.5% additional rate benefit.

Karnataka Bank Senior citizen FD deposit rates

So, post the rate hike, senior citizens on FD deposits of the highest tenure up to 10 years and above 5 years will continue to fetch 6.0% return per annum, while Fds for 1-2 years and those above years to 5 years will get 5.75% and 5.9% interest rate per annum, respectively.

Karnataka Bank NRE rupee term deposit rate (w.e.f. July 1, 2022)

Meanwhile, in the case of NRE Rupee Term Deposits below Rs. 2 crore, the interest rate will increase to 5.35% on 1-2 years tenure, and 5.5% on above 2-5 years tenure.