Several major lenders have announced plans to raise their interest rates after the central bank surprised the market by raising its key interest rate by 0.25 percentage points to fight inflation.
State-owned Bank of Taiwan (臺灣銀行), the nation’s largest lender, said it would follow suit by today raising its rates for one, two and three-year savings deposits to above 1 percent.
Its benchmark one-year deposit rate would rise to 1.09 percent from 0.84 percent, the bank said, adding that a deposit of NT$1 million (US$35,261) would receive NT$10,900 in annual interest, up by NT$2,500.
Photo: CNA
The rates of its two and three-year deposits would rise by 0.28 percentage points and 0.29 percentage points respectively, exceeding the central bank’s interest rate increase, it said.
Large deposit accounts thus far received relative little interest, so that a steep rate increase would reflect market reality, it said.
Partly state-owned lenders Taiwan Cooperative Bank (合作金庫銀行) and First Commercial Bank (第一銀行) also raised their interest rates, effective today.
Taiwan Cooperative Bank raised the rates for fixed-term deposits by 0.25 percentage points — with rates from 1.065 percent to 1.115 percent for deposits running one to three years.
First Commercial Bank also raised the rates for fixed-term deposits by 0.25 percentage points — to 1.065 percent for one-year deposits, and 1.09 percent for two and three-year deposits.
The highest rate for term deposits at First Commercial Bank would be 1.27 percent, it said.
Home mortgage interest rates are also expected to rise.
CTBC Bank (中國信託銀行) said it would adjust its home mortgage rates on Wednesday at the earliest, while Cathay United Bank (國泰世華銀行) and Taipei Fubon Commercial Bank (台北富邦銀行) said they might adjust their rates as early as next month.
Central bank Governor Yang Chin-long (楊金龍) on Thursday said the rate increase is expected to lead to an average mortgage interest increase of NT$19,075 on a NT$7.63 million mortgage.
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