State Bank of India (SBI), one of the premier public sector banking institutions in India, has hiked the Domestic Term Deposit or Fixed Deposit (FD) interest rate by 25 basis points. A basis point is defined as one-hundredth of one percentage point.
For a deposit of a value less than Rs.1 crore, the interest rates were previously 6.40% p.a. and 6.60% p.a. for the 1 year to less than 2 years term and 2 years to less than 3 years term respectively. SBI recently announced that the rates will now be 6.65% p.a. for both the term periods mentioned above. In case of fixed deposits for senior citizens, the interest rates that were 6.90% p.a. and 7.10% p.a. for the 1 year to less than 2 years term and 2 years to less than 3 years term respectively are now 7.15% p.a. for both periods.
The hike in interest rates is not limited to deposits below Rs.1 crore but extend to deposits above Rs.1 crore as well. For deposits of values above Rs.1 crore, the rates for both, public and senior citizens, have been increased by 25 basis points for the 1 year to less than 2 years term. The new rates are 7.00% p.a. for public and 7.50% p.a. for senior citizens.
The revised interest rates will be beneficial for savers since they can enjoy higher returns for staying invested for more than 1 year. The interest rate for other terms have remained unchanged. The fresh rates came to effect on 28 May 2018.
The saving deposit interest rate of SBI is currently at 3.50% p.a. for deposits up to Rs.1 crore and 4.00% p.a. for deposits above Rs.1 crore.
State Bank of India offers an array of banking products for the commoners, agriculturists, NRIs, and so on. It was listed as a Fortune 500 company in 2017 as one of the largest corporations in the world.