New Delhi, May 16, 2024.
The country’s largest lender, State of India (SBI), has increased interest rates on short-term retail fixed deposits (FDs) by 25 to 75 basis points (bps) – a move which is likely to be followed by other banks.
This is the first increase in the fixed deposit rates by the bank since December 2023.
A fixed deposit is an investment instrument where an amount is deposited with banks for a set period and at a fixed rate of interest. Rates on FDs are important for people, especially senior citizens, who are looking for safe investment options.
For retail domestic term deposits (below Rs 2 crore) maturing between 46 to 179 days, the bank has revised upwards the interest rate by 75 bps to 5.5 per cent from 4.75 per cent. Senior citizens will now get an interest rate of 6 per cent, as against 5.25 per cent earlier, on the same tenor. One basis point is one-hundredth of a percentage point.
On deposits maturing between 180 to 210 days, the interest rate has been increased to 6 per cent from 5.75 per cent. The interest rate for senior citizens has been revised from 6.25 per cent to 6.5 per cent on similar maturity deposits.
The bank is now offering a rate of 6.25 per cent on deposits maturing between 211 days to one year, as compared to 6 per cent earlier. On the same tenor, the interest rate for senior citizens has been raised to 6.75 per cent from 6.5 per cent.
The bank has also hiked interest rates on domestic bulk term deposits (Rs 2 crore and above) by 10 bps to 50 bps across different maturities.