This Large Private Bank Hikes Deposits Rates, Now Offers 8.25% Interest

The last few weeks has seen several banks revising their interest rates and making adjustments based on their own needs. Some have raised fixed deposit interest rates while others have marginally reduced rates. Joining the list of banks that have adjusted their interest rates is Yes Bank.

Highest interest rates offered by Yes Bank

The highest interest rate that is offered by Yes Bank is now on the 18-months to 36-months tenure. On this tenure the bank offers an interest rate of 8.25% for senior citizens and 7.75% for others. This is slightly better than what most large government banks are offering. In fact, the rates are more or less similar to what IndusInd Bank is presently offering their investors.

Other tenures

The other tenures by Yes Bank offers a slightly lower interest rate. For example, the 36-months to 60-months tenure offers an interest rate of 8% for senior citizens and 7.25% for regular depositors. The 6-months to 120 months offers 7% to 7.75% interest rate. Overall, the interest rates are higher for the 18 months to 36-months tenure.

What should investors do now?

We would recommend that investors go for deposits ranging from 3 years to the 60-months tenure. It is better to stay invested for the longer term as interest rates could fall in the short to medium term. As inflation in the economy starts tapering there is a possibility that the Reserve Bank of India may start cutting interest rates. The country's central bank has already hiked interest rates by 250 basis points in the last few quarters. From here on there is a possibility that we might see a cut in interest rates, especially from the beginning of next year. It is therefore advised to go for deposits with a slightly more longer duration. We like the deposits of Yes Bank and also the deposits from IndusInd Bank which offers similar interest rates. The deposits from HDFC Bank, which offers a maximum of 7.25% interest rates is also not bad. Look for safety along with decent returns.