Three public sector banks hike deposit rates

In good news for small investors, three public sector banks have raised their retail term deposit rates by 25-125 basis points, or 0.25-1.25 per cent.

United Bank of India increased interest rates on domestic term deposits of below Rs5 crore by at least 25 basis points, effective immediately. The Kolkata-based lender will now pay nine per cent on term deposits with one-year maturity, compared with 8.75 per cent earlier. Term deposits of 30 days to less than a year will get interest at 8.75 per cent.

Punjab National Bank has increased interest rates on certain deposits by 125 basis points.

UCO Bank raised interest rates on retail term deposits of between Rs1 and Rs5 crore by 45-50 basis points, effective from Sunday.

By past trends, other banks, including private lenders, would probably raise their rates to match.

According to bankers, the tight liquidity situation has compelled lenders to increase deposit rates.