for deposits.

However, there is no associated rise in the rates charged on credit card balances.

Interest rates on fixed rate Bermuda dollar deposits have been raised effective immediately.

Interest paid on balances in Bermuda and US dollar statement savings accounts, passbook savings and Bermuda dollar premier chequing accounts increased have been raised one quarter of one percent, the bank said.

The actual rate on these accounts vary from a high of 3.75 percent for statement savings. The interest rate paid on premier accounts varies with the balance held.

"Customers of the Bank of Bermuda benefit immediately from this rise in rates. Our intent is to pass on any advantage to our customers as quickly as possible,'' Bank of Bermuda executive vice president, retail banking and administration Barry Shailer said.

The Bank of Bermuda increase to its deposit rate follows a Bank of Butterfield announcement. The Bank of Butterfield raised deposit rates but also raised credit card interest rates.

Earlier, Bermuda banks raised the Bermuda dollar base rate a quarter of one percent to 6.25 percent following a quarter percent hike by the US Federal Reserve.

The base rate is an interest rate used for pricing lending rates.