Last week's 25 basis point interest rate hike may not be the last, Bank of India, many expect the governor D Subbarao notify each increase of 25 basis points over its policy in the middle of the barn 29 October. But if the fixed deposit interest rates, it now appears that a return of 10% is better than the depositors can expect the bankers did not threaten any pressure to raise deposits, because of the liquidity situation improved.

This may be the best time for applicants to lock systems long-term deposit, as most banks interest rates begin to move down over two years and offer better prices for deposits short term. "It's a good time to lock in long-term deposits. At most there may be 25 to 50 basis points increase in short-term deposits," said KR Kamath, Chairman, Punjab National Bank. "If there is a pick-up in credit to banks attempted to offer slightly higher to grow loans, but at present we have sufficient liquidity," he added. Monday, the Dhanlaxmi Bank the first lender to raise lending rates, after raising rates last week. It howeverleft deposit rates unchanged.

SBI chairman Pratip Chaudhuri said after the monetary policy at this time sufficient liquidity for the bank. This reduces the incentive to increase deposit rates. SBI offers a fixed rate of 9.25% (9.75% for the elderly) on all deposits over one year. ICICI Bank is the maximum rate of 9.25% on different bases. But he has a special plan that allows seniors 10% return on deposit schemes of 990 days. Punjab National Bank offers the highest yield of 9.5% (10% for seniors) on 1111-day deposit.

The main reason why bankers are unlikely to raise deposit rates in the long term is that there is ample liquidity in the market. Banks have Rs 3,01,131 crore added to their deposit base until August 26 years compared to Rs 1,81,291 crore last year. During the same period of their loan portfolio increased by Rs 102,779 crore against Rs 109,189 crore last year. It allowed banks to repay some of their high cost deposits and offset some of the increased cost of funds. Bankers also expect that interest rates will go down in a few years, and most banks did not raise deposit rates at the end of long. In fact, for many banks deposits of three years with lower yields on two-year deposits.

Banks with a small proportion of retail deposits is likely to relook at their deposit rates as soon as possible. In general, higher deposit rates to their customers relook at idle funds in your savings account and transfer them in the FDs.

Source: [ET]