FD interest rates: HDFC Bank Vs ICICI Bank: Which bank is offering highest 1-3 FD interest rates after hike

and have raised their fixed deposit interest rates twice within a short period of time which is good news for FD investors, who have been stuck with record low interest rates in previous years.

Banks are passing on the benefit after the Reserve Bank of India hiked repo rate by 90 basis points over the last one month. Here is a look at which bank is offering the highest FD interest rates for the 1-3 year tenor.

HDFC Bank FD interest rate for 1- 3 years tenor

For the second time in a week, HDFC Bank raised the interest rates on fixed deposits (FDs) on amounts below Rs 2 crore. The bank increased fixed-rate by up to 25 basis points; the new interest rates take effect on June 17, 2022.

On fixed deposits maturing in one year to less than two years, the bank will now offer an interest rate of 5.35 percent, up from 5.10 percent previously, a 25-basis point rise. Deposits that mature in two years, one day, or three years will now be paid 5.50% instead of 5.40% previously, an increase of 10 basis points.

ICICI Bank FD interest rate for 1- 3 years tenor

ICICI Bank, a private lender, has increased the fixed deposit interest rates on sums under 2 crore once more, barely six days after hiking them before. The private bank increased fixed-rate (FD) rates on a few select tenors by 5 basis points, and the new rates are effective as of right now, on June 22, 2022.

Interest rates for FDs with a one- to two-year duration is hiked from 5.30 percent to 5.35 percent. The bank offers 5.5 percent interest on two-year and one-day to three-year fixed deposits.

Short or long term, which tenure will rise first and the most?

When interest rates rise sharply the increase is not always evenly distributed. Usually, it is the long-term FD that can see a higher increase in the interest rates compared to the short term at this stage.

Should one wait for rates to go up beyond 7% to book long term?

So, if you are looking to book an FD for the long term or a big FD is due for renewal, this may not be the right time to do so. There is no reason for one to lock into long term rates now. It would be good to take a short term auto renewing FD right now of about 6 months at a time. After about a year, a longer-term FD can be taken when scope for further increases is likely to be slower and limited