HDFC Bank has increased fixed deposit rates on certain tenors by up to 20 basis points amid a strong credit growth in the banking system.

The upward revision also comes at a time the Union Budget has increased the securities transaction tax (STT) on futures & options trading, and the short-term capital gains tax (STCG) and long-term capital gains tax (LTCG) on equities. This is expected to result in some fund diversion to the banking system.

According to the latest Reserve Bank of India (RBI) data, while credit growth in the system is 17.4 per cent, the rate of accretion in deposits stands at 11.1 per cent.

For the depositors of HDFC Bank, the revised rates are for deposits under ₹3 crore and it was effective from Wednesday.

Following the hike, the private sector lender is offering the highest interest rate of 7.40 per cent in the tenor of 4 years and 7 months to 55 months. It will fetch 7.90 per cent if the depositor is a senior citizen. It stands at 7.35 per cent for deposits having a tenor of 2 years 11 months to 35 months.

During the first quarter ended June 30, HDFC Bank saw its total deposits standing at ₹2,379,100 crore — an increase of 24.4 per cent over June 30, 2023.

Low-cost CASA (current and saving account) deposits grew 6.2 per cent with savings account deposits at ₹5,96,400 crore and current account deposits at ₹2,67,300 crore.

Gross advances were at ₹24,86,900 crore as of June 30, an increase of 52.6 per cent over the year-ago period.