Banks have increased interest rates up to 9.5 per cent on Certificates of Deposit (CDs), an instrument through which they mop up short-term funds from corporates and other investors.Official sources said that Banks are offering 9.2 per cent to 9.5 per cent on CDs to raise additional funds from companies and tide over the liquidity shortage, Following suggestions by Reserve Bank Governor D Subbarao to raise deposit rates, several banks, including leading lenders like State Bank of India and ICICI Bank, have raised the rates by up to 150 basis.Banks are permitted to issue CDs with a maturity ranging from seven days to one year to raise short-term funds, though financial institutions can raise funds for up to three years from the instrument.