Even if all loans, including home and car, is expensive, investors receive a better return on their savings.

Rising interest rates are within a week, the RBI increased its key interest rates a whopping 50 basis points to control high inflation.

IOB, Syndicate Bank and Punjab and Sind Bank lending increased by 50 basis points, while the other entities in the sector lender Corporation Bank increased its 40 basis points.

Syndicate Bank has also revised term deposit rates by up to 50 basis points for maturities chosen.

The interest rate on fixed deposit of 270-364 days now earning 9.75 % from the current 9.25 %, an increase of 50 basis points.

Maturity of long-term storage of 91-120 days has been revised upwards by 35 basis points to 7.60 %, Syndicate Bank said in a statement.

The revised rate will apply to all loans in August 1, 2011.

More than a dozen banks have already announced an increase in interest rates after the RBI monetary action by July 26, and many more are likely to do so in the coming days as the cost of funds has increased.

Earlier this week, the RBI raised the short-term lending (repo) rate by 50 basis points to 8 % and short-term borrowing (Reverse Repo) rate the same amount of 7 % in an attempt to tame inflation.

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Thereafter, the rate of interest under the Permanent Mechanism for marginal lending window, again, an increase of 9 percent compared to the previous level of 8.5 %.

Source: [ET]