Mumbai: State Bank of India (SBI) on Wednesday revised upwards the interest rates on fixed deposits by up to 50 basis points.
The leading bank’s decision could trigger similar trends across the sector with others following suit.
Raising of interest rates on retail term deposits will target deposits below Rs 2 crore.
A fixed deposit is an amount deposited in a bank for a set period at a fixed rate of interest.
Many senior citizens see it a viable investment option for their retirement benefits.
SBI has increased interest rates by 50 basis points (bps) to 3.5 per cent from 3 per cent for retail term deposits maturing between 7 to 45 days, The Indian Express reported.
To senior citizens the banks is offering interest rate of 4 percent on the same tenor from previous 3.5 per cent.
Meanwhile, keep in mind one basis point is one-hundredth of a percentage point.
The interest rate for fixed deposits of 46 days to 179 days has been raised by25 bps to 4.75 per cent from 4.5 per cent.
Where previously it was 5 per cent, senior citizens on this tenor are being offered an interest rate of 5.25 per, the report said citing SBI website.
The new rate of interest for deposits maturing between 180 days to 210 days is 5.75 per cent against what was previously 5.25 per cent.
As per the report, the rate of interest to senior citizens on this tenor is 6.25 per cent as against previous 5.75 per cent.