Following last week’s 35 bps point raise in the repo rate by the Reserve Bank of India (RBI), the State Bank of India (SBI) increased interest rates on domestic term deposits, including bulk deposits. According to the SBI website, the bank raised the FD rates by up to 65 bps on a few tenors beginning on December 13.

Source: Wikipedia

In general, when the Reserve Bank raises the policy repo rate, fixed deposit and lending rates also rise. Most banks have actively adjusted their FD rates since May of this year in accordance with the results of the RBI’s policy, luring more investors to choose this investment choice. SBI had last made changes to its interest rates in June 2022.

New Alterations

The State Bank of India increased interest rates on domestic term deposits by 15 to 100 bps. 

The 180–210 day period covered by the 100 bps increase has a revised rate of 5.5% per year as opposed to the prior rate of 4.5 percent per year. According to the rate card on the SBI website, retail deposits up to Rs 2 crore in the same category maintained their 5.25 percent rate.

For bulk deposits of 7 to 45 days, the SBI will pay 3%, which is the same as before.

The interest rate for FDs with terms between 46 and 179 days is 4.50%, while it is 5.25 percent for those with terms between 180 and 210 days. 

The interest rate is 5.75 percent for time deposits (FDs) that last 211 days to less than a year.

Bulk deposits of one year to less than 2 years will now earn the interest rate of 6.75%, up from 6.10%.

Retail term deposits with maturities between two and three years are another programme offering the same interest rate. From 6.25 percent, it has increased to 6.75 percent.

Currently, 6.25 percent interest will be offered on plans that mature in three years to less than five years and five years up to ten years.

According to bankers, the difference between deposits and advances’ yearly increase is now very large. This has compelled banks to raise interest rates and intensify resource mobilisation operations across branch networks and online platforms.

SBI WeCare Deposit Scheme

According to the public lender, retail term deposits with tenors of 5 years or more will earn 7.25 percent interest under its special SBI Wecare deposit plan, which is intended mainly for senior residents. The bank noted on its website that the interest rate owed to SBI employees and pensioners will be 1% higher than the relevant rate.

Customers can use the SBI Wecare deposit programme till March 31, 2023.

FD rates of other major banks

HDFC Bank revised its interest rates on 8th of November, 2022. The bank is now said to provide a variety of fixed deposits and term deposits with terms ranging from seven days to ten years. For regular clients, the rates run from 3% to 6.25 percent. Interest rates for senior citizens range from 3.5% to 7% for plans lasting 7 days to 10 years.

For a variety of plans, with terms ranging from seven days to ten years, ICICI Bank is all set to provide varying interest rates between 3.00 and 6.60 percent per year. Those that are older are given a higher interest rate. On November 16, 2022, the bank adjusted its rate of interest for fixed-term deposits under Rs 2 crore.

Apurva is an Economics and Finance enthusiast with a knack for Writing. When she's not busy studying or writing her journal, she can be found with her nose in a book!

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