The increase in fixed deposit rates may lead to a hike in lending rates sooner or later. Fixed deposits of less than Rs 1 crore for 271 days to less than one year would yield interest of 8 percent, up from 7.50 percent earlier, PNB said in a statement.

Term deposits with a maturity period of 91 days to 179 days would attract interest of 7 percent, up from 6.75 percent. For maturity periods ranging from one year to 10 years, a uniform interest rate of 9 percent is applicable, it said. The new rates will be effective from November 11, PNB said.

"The bank has not taken any decision on increasing the minimum lending rate as of now," PNB chairman and managing director KR Kamath said. Canara Bank said fixed deposits of less than Rs 1 crore with a maturity of 46 days to 60 days and 61 days to 90 days would now fetch an interest rate of 7.50 percent, up from 7 percent earlier.

For deposits for periods above one year to less than two years, the rate would be 9.05 percent, up from 8.75 percent. For five years and above to less than eight years, the interest would be 9.05 percent, up from 8.75 percent, Canara Bank said. An additional interest rate of 0.50 percent would be given to senior citizens for domestic term deposits, it said.

With the revision in deposit rates, the peak rate has gone up to 9.05 percent. Term deposits for one year to up to 10 years would earn interest of 9.05 percent. Earlier this week, private sector Axis Bank revised interest rates on select maturities for fixed deposits of less than Rs 1 crore.

The rate revision by various lenders comes after the Reserve Bank of India increased interest rates by 0.25 percent in its monetary policy on October 29. Following this, State Bank of India, the country's largest lender, and HDFC Bank hiked their base rate or the minimum lending rate by 0.20 percent to 10 percent.


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