As inflation rate is increasing Reserve Bank is also increasing interest rates to control high inflation. Increasing repo rate, reserve repo rate are just few options left for Reserve Bank to control inflation.
It is expected if loan interest rate will be high then people and corporate will borrow less loan and growth will be compromised for increasing inflation, but as far now there is no decrease in inflation.
After increasing so much interest rate only one thing is happen good for common man that he now get much better interest rate on fixed deposits. Before getting excited look at the inflation rates it is not going to give you good returns on your saving.
Example you are planning to buy a car after 1 year and you created a fixed deposit of Rs. 1,00000/- at interest rate of 9%. Current inflation rate is of 10%. After 1 year you will get Rs. 109000/- from your fixed deposit. Now how much that money worth you? Considering inflation rate of 10% anything you buy today will cost you about 10% more. If you have to pay Rs. 100000/- 1 year back now same thing will cost you 110000/- and your fixed deposit have given you only 109000/- this mean you have to put Rs. 1000/- extra from your pocket to buy that thing.
This is why stock market is consider much better then fixed deposit for long term as past record shows that stock market has given 15% return per year. But if you are planning for short term then stay away from stock market and always look for fixed deposit.
Today most of the banks are giving 9%+ of interest rate on their fixed deposits which is not bad at all. If inflation rate started decreasing in next few months or years then today’s fixed deposit will give you very good returns. Almost all banks are offering additional 0.25% to 0.50% extra interest rate for senior citizens on fixed deposits.
Here is the list of current fixed deposit rates in India from some of the popular banks in India. Interest rates may vary because of amount you are depositing and if you are senior citizen of India then you get much better interest rate on fixed deposits.
| Bank | 90 Days | 180 Days | 1 Year | 3 Years | 5 Years |
| State Bank Of India | 7.00 | 7.25 | 9.25 | 9.25 | 9.25 |
| Punjab National Bank | 5.50 | 8.00 | 9.25 | 9.25 | 9.00 |
| Allahabad BAnk | 6.00 | 8.00 | 9.50 | 8.75 | 8.50 |
| HDFC Bank | 6.50 | 6.75 | 7.25 | 8.50 | 8.25 |
| ICICI Bank | 6.50 | 7.00 | 8.25 | 8.75 | 8.75 |
| Axis Bank | 6.25 | 7.75 | 9.25 | 8.50 | 8.50 |
| Kerela State CO-Operative Bank | 8.50 | 9.25 | 10.00 | 10.25 | 10.25 |
| Karur Vysya bank | 7.65 | 7.65 | 10.00 | 9.75 | 9.50 |
| City Union Bank | 6.00 | 6.50 | 10.00 | 9.75 | 9.75 |
| Oriental Bank Of Commerce | 5.75 | 9.00 | 9.75 | 9.25 | 9.25 |
*(As on September 2011)
nice information for me…………..