PTC Web Desk: The State Bank of India (SBI) on Wednesday implemented an interest rate increase of up to 50 basis points (0.50%) on specific fixed deposits (FDs) this week, marking a significant adjustment after a 10-month period. The adjustment primarily focuses on deposits below Rs 2 crore.
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The State Bank of India has elevated the rates across various tenures, excluding FDs maturing within particular durations. For instance, deposits maturing within seven days to 45 days observed a 50 bps increase, resulting in a 3.50% interest rate. Similarly, for the 46-day to 179-day tenure, rates rose by 25 bps to reach 4.75%.
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Additionally, deposits spanning 180 days to 210 days will now earn a 5.75% interest rate following a 50 bps hike. Likewise, the 211-day to less than 1-year term will offer a 6% interest rate post a 25 bps increase. SBI also increased rates by 25 bps for longer-fixed deposits, establishing a 6.75% interest rate for FDs maturing in 3 years to less than 5 years.
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RBI decision
SBI’s move aligns with similar actions taken by other banks such as Bank of India, Federal Bank, Kotak Mahindra Bank, and DCB Bank, all of which raised FD interest rates this December. These adjustments come after the RBI’s decision to maintain the repo rate at 6.5% in December 2023, following six consecutive rate hikes totaling 250 basis points until the pause in April. The alterations in FD rates across banks are in response to the RBI’s policy decisions, adapting to the fluctuations in the repo rate.
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