Why did banks raise deposit rates - is that good or bad?

Higher deposit rates are banks' attempt to attract people's money when the economy is under strain. Usually it means inflation is rising or the central bank has raised its key rates to contain it. For you as a depositor, this might be good in terms of interest - you'll get more on your money. But it's also a hint that the purchasing power of money is falling, otherwise why would banks pay more?

There's no need to rush your money in if you're not ready to part with it for a year or two. Yeah, the interest is higher, but it's often offered specifically for longer-term deposits. If you suddenly need the money earlier, early withdrawal might mean zero percent or even a penalty. Check the specific terms of the deposit and think about whether you really won't need that money.

For an average person, a rate hike is a double-edged story. On one hand, you can earn more on deposits. On the other, it often comes with prices going up for credit and goods in stores. If you have a mortgage or consumer loan, your payments might increase. So don't rush to celebrate high interest rates - look at the big picture of your budget.