Saturday, September 23

SBI Increases Interest rates on Fixed Deposits

The largest public lending organisation in the country ,State Bank of India (SBI) has brought in a bundle of good news for investors as it has hiked interest rates on fixed deposits with different maturity tenures starting from 2 to 10 years.

The new interest rate bracket for SBI fixed deposits ranges between 6.6 and 6.75 percent.For fixed deposits under Rs. 1 crore subjected for two-three years tenure, the new rate has been changed to 6.60% from earlier 6.50%.On similar lines, term deposits ranging between 3 to 5 years can now be availed at 6.70% interest than existing 6.50%

People who are looking for long term investment i.e for 5 to 10 years, will now be able to avail interest rates of 6.75% from 6.50%.However,no change has been made for fixed deposits ranging from 7 days to 2 years.

Senior citizens seem to be availing the most of this move who will now be entitled to 7.10% interest rate for deposits of 2 to 3 years.While, for FD’s of 3 to 5 years, interest rate has been revised to 7.20% against earlier 7.00%.Long term deposits under 5 to 10 years range will now be availed at 7.25% against 7%.

With more than one-fifth of country’s business assets in its acquisition, SBI has brought this significant move and that too just before a few days when Reserve Bank of India’s (RBI) bi-monthly monetary policy is to be announced on April 5. Owing to the changes in SBI fixed deposit rates, other private and public sector banks might look for a revision too soon.

Although, RBI had kept free from doing any changes in policy rates in its last three review meetings, the rate cycle has been on the bloom owing to rise in bond yields. Banks in India are focusing on meeting their capital requirements in order to recover from bad loans that has a direct impact on their viability and sustenance in the market.

New Fixed Deposit Interest Rates Effective from 28 March, 2018 for deposits up to Rs. 1 crore

Tenors Existing Rate for Public Revised Rate for Public Existing Rates for Senior Citizens Revised Rates for Senior Citizens
7 to 45 days  5.75 5.75 6.25  6.25
 46 to 179 days 6.25 6.25 6.75 6.75
180 to 210 days 6.35 6.35 6.85  6.85
210 days-1 year 6.40 6.40 6.90  6.90
I year to less than 2 year 6.40 6.40 6.90 6.90
2 year to less than 3 year 6.50 6.60 7.00  7.10
3 year to less than 5 year 6.50 6.70 7.00  7.20
5 year to less than 10 year 6.50 6.75 7.00  7.25