Home / News / State Bank Of India-SBI Hikes Term Deposit Rates

State Bank Of India-SBI Hikes Term Deposit Rates

State Bank of India-SBI

State Bank of India-SBI

State Bank Of India-SBI Hikes Term Deposit Rates

State Bank Of India-SBI hikes wholesale, retail term deposit rates, In a bid to grow its fund base, SBI has increased its interest rate on some retail and wholesale deposits. For retail customers investing up to Rs 1 crore, the bank has raised rates on deposits with tenure of above two years between 10bps and 25bps (100 basis points = 1 percentage point).

With effect from March 28, the lender will offer 6.6% on retail deposits between two and three years as against 6.5% earlier. Deposits between three and five years will earn 6.7% as against 6.5% earlier.

The highest increase is for deposits above five years where the bank now offers 6.75% as against 6.5% earlier. Senior citizens get 50bps more than regular rates.

For fixed deposits (FDs) below Rs 1 crore of tenure less than two years and below, the rates remain unchanged for both general public and senior citizens.

This is the third time SBI is increasing deposit rates in 2018. Costlier deposits will lead to SBI facing pressure on margins unless it hikes it lending rates. After a long time, the bank’s return on five-year deposits (for senior citizens) is matching the yield on five-year government bonds. According to bankers, an increase in deposit rates may lead to an upward revision in SBI’s marginal cost of lending rate (MCLR) — the benchmark used by the bank for all floating-rate loans.

With March 29 and 30 being public holidays, lenders have only March 31 to beef up their deposits before they close their books for the financial year. In a bid to draw wholesale depositors, the lender is offering 7% on deposits between Rs 1 crore and Rs 10 crore for one-to-two-year tenures.

SBI staff and pensioners will get 1% extra on the applicable rates for the general public. SBI pensioners (age 60 years and above) will benefit from the higher interest rate of 0.5%, which is available to senior citizens along with the 1% extra as mentioned above.