Mumbai, March 29: Central Bank of India today raised interest rates on domestic term deposits by 25 basis points to 50 basis points. The changes are aimed at meeting the growing demand for credit and will apply from April.

The bank has increased interest rate offered on deposits kept for 46 to 90 days to 5 per cent per annum from 4.75 per cent; for 91 to 179 days to 5.50 per cent from 5.25 per cent; for 180 days to less than one year to 6 per cent from 5.75 per cent; for one year to less than three years to 6.25 per cent from 6.00 per cent; for three years to less than five years to 6.50 per cent from 6.25 per cent; for five years and above to 6.75 per cent from 6.25 per cent.

The bank said deposits made by senior citizens will enjoy an additional interest rate of 0.50 per cent. Senior citizens above 70 years are eligible for an additional rate of interest of 1 per cent. The revised domestic term deposit rates will apply only to fresh deposits and renewal of maturing deposits.

The upward revision in interest rate comes at a time when banks are in need of resources to meet rising credit demand.

The sector has been hit by retail individuals not parking their savings into deposits. Banks have, in the recent past, tried to make deposits more attractive by offering higher interest rates.

FCNR hike

HDFC today hiked its interest rates on foreign currency non resident (FCNR) deposits by 25 basis points. This came close on the heels of the Reserve Bank of India’s decision to hike the FCNR deposit interest rate ceiling by 25 basis points yesterday.

Bank of Baroda too effected an upward revision on the FCNR deposits by an equal percentage. HDFC Bank offers FCNR deposits in dollars, pounds, euros, yen, Australian dollars and Canadian dollars.