JPMorgan has joined Wells Fargo in passing the additional cost, arising from US Federal Reserve's rate hike yesterday to consumers by increasing the prime rate by similar amount, 25 basis points to 3.5%.

However, both the banks may not rise deposit rates immediately and rise in prime rate doesn't ensure rise in deposit rates as they are not linked.

Prime rate is vital as it is considered as the base rate to be charged to most credit worthy customers and linked to variety of other loans. Even after this rise, overall banking rates remain still very accommodative compared to pre-crisis, when the rate was above 8%.

At a time of hike banks are expected to do much better as their margin improve. During the dovish cycle since 2009, banks' margin has fallen by as much as 80 basis points. Naturally, after FED hiked rates financial in S&P 500 moved up almost 2%.

FED officials will be closely monitor, how this 25 basis points hike evolves through the economy.