Short term deposits below 1 crore is beneficial
By Neelima Shankar
Nov 8, 2013
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After the official announcement of the monetary policy was made on October 29, Major financial institutions have hiked the rate of lending. HDFC Bank Ltd and State Bank of India (SBI) both hiked the base rate from 9.80% to 10%. In the meantime, other financial institutions like Axis Bank Lts, SBI, Allahabad Bank and Oriental Bank of Commerce (OBC) have hiked the interest rates on fixed deposits between 20-120 basis points (bps).

Why is there a hike in the rates?

After the official announcement was made of the monetary policy, the liquidity for short term in the framework has enhanced. The Liquidity For medium and long haul still continues to be the same. Liquidity and Inflation play a vital role in the determination of the new rates.

What you can do?

If you are investing for a short time, then the best thing to do would be to compare the interest rates of various places before deciding. To be on the safe side, it is best to invest in fixed deposits

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