Several major lenders are to raise interest rates for depositors today, after the central bank increased its benchmark rediscount rate from 1.375 percent to 1.5 percent on June 16.

After major lenders raise their time deposit rates by 12.5 basis points, depositors who own NT$1 million (US$33,647) in time deposit accounts are to receive an additional NT$3,750 in interest annually.

State-owned Bank of Taiwan, the nation’s biggest lender, is to increase its floating rate for one- year time savings deposits by 0.125 percentage points to 1.215 percent to fully reflect the central bank’s rate adjustments.

As a result, depositors who have NT$1 million in one-year time savings accounts with the bank are to receive NT$12,150 in interest annually, it said.

The bank is also to raise its two-year time savings deposit floating rate by 0.125 percentage points to 1.25 percent, while its three-year time savings deposit floating rate is to rise 13 basis points, higher than the central bank’s hike, to 1.285 percent, it said.

State-run Land Bank of Taiwan is to raise the floating and fixed rates for all of its time savings deposit accounts by 0.125 percentage points, with the floating rate for the one-year time savings deposit account reaching 1.215 percent.

Government investment lender First Commercial Bank is to raise its one-year, two-year and three-year savings deposit floating rates by 0.125 percentage points to 1.215 percent, 1.395 percent and 1.395 percent respectively, effective on June 20.

It is also to raise the fixed rates by no less than 0.145 percentage points to 1.235 percent, 1.26 percent and 1.27 percent for its one-year, two-year and three-year time savings deposits accounts respectively.

State-run Taiwan Cooperative Bank is to increase its floating rates for one-year to three-year time savings deposits and the fixed rates for its one-year to three-year time savings deposits by 0.125 percentage points.

While deposit rates are to rise in line with the central bank’s rate hikes, market observers said the banking sector would raise mortgage rates by more than 12.5 basis points soon to have a higher interest spread, which is expected to improve banks’ profitability.

Taipei Times