HDFC Bank, India's largest private-sector lender, raised interest rates on fixed deposits below 3 crore rupees from Nov. 4, adding as much as 50 basis points on some tenures, according to the rate card on its website. The biggest change for long-term savers was at the far end: deposits of five years and one day to 10 years now pay 6.60% to general customers, up from 6.15%.

The change came four weeks after the Reserve Bank of India raised its policy rate. For nonresident Indians in Hong Kong, Singapore and the Gulf, the move matters directly: the new card applies to domestic, NRO and NRE deposits, although HDFC Bank says its extra rates for senior citizens do not apply to NRIs, and NRE deposits must run at least one year.

What HDFC Bank changed

The increases were uneven. Comparing the new card with the schedule HDFC Bank had used since Aug. 19, as reported by Upstox, deposits of 61 to 90 days now earn 4.75%, up from 4.25%, the largest single increase. Deposits of six months and one day rose 15 basis points to 5.65%, and nine-month deposits rose by the same amount to 5.90%.

The one-year rate did not move. It stays at 6.25%, and the 15-month bucket is unchanged at 6.35%. Longer money gained more. The 18-month to two-year rate rose to 6.50% from 6.45%, two to three years to 6.55% from 6.45%, and three years and one day to five years to 6.60%, from 6.50% for most of that range and 6.40% for its final stretch.

That leaves the bank's general rate flat at 6.60% for anything from three years to 10 years, removing the old penalty for locking up money beyond five years.

Senior citizens gained less at the top. Their best rate, for three years and one day to five years, rose to 7.20% from 7.10%. For five years and one day to 10 years, older customers now get 7.10%.

The RBI hike and the rest of the market

The RBI's Monetary Policy Committee voted unanimously on Oct. 7 to lift the repo rate by 25 basis points to 5.50% and shifted its stance to "calibrated tightening." The committee said that signal meant rate cuts were off the table in the near term, with the next move either a hike or a pause.

Large banks were slow to pass that on. A week after the decision, State Bank of India Chairman C S Setty indicated banks might not raise deposit rates for two to three months because liquidity in the system was sufficient, Upstox reported, though he allowed that individual lenders could adjust. Capital Times reported earlier that Indian loan growth has been running ahead of deposit growth, the usual trigger for banks to bid harder for savings.

HDFC Bank's main rival, ICICI Bank, had set its current card on Oct. 13 with a top general rate of 6.50% for three to 10 years and 7.10% for senior citizens over three to five years, according to Upstox. Business Today reported on Nov. 7 that ICICI Bank and Punjab National Bank had also revised rates, and listed ICICI's senior rate for three years and one day to five years at 7.20%, matching HDFC Bank. PNB's best senior rate, on its 444-day special deposit, was up to 7.10%, the publication said.

Where savers can earn more

The large banks still trail smaller lenders by a wide margin. Suryoday Small Finance Bank advertised 8.60% for senior citizens and Utkarsh Small Finance Bank 8.50%, according to Business Today, which also listed Kotak Mahindra Bank at up to 7.55% and Axis Bank at up to 7.35% for older savers.

On 10 lakh rupees, the gap between 8.60% and 7.20% is about 14,000 rupees a year in simple interest before tax, Business Today calculated.

Higher rates at smaller banks come with a limit worth knowing. The Deposit Insurance and Credit Guarantee Corporation covers eligible deposits up to 5 lakh rupees per depositor per bank, including principal and interest, Business Today noted. Savers spreading larger sums across several small finance banks keep each holding under that cap for full protection.

The RBI's next policy decision is due at the end of its Dec. 2 to Dec. 4 meeting, the central bank said, and a second hike would test whether other large lenders follow HDFC Bank's lead before the year ends.