State Bank of India (SBI), the largest bank of the country, today announced increase in interest rate on fixed deposits by 0.25 per cent on select maturities.
Of the total 9 maturity periods for fixed deposits, rates have been revised upwards in 4 categories with maturities of over one year.
The new rates would be effective from March 1, SBI said in a statement.
With the revision, the interest rate on 1-2 years fixed deposit would go up to 8.75 per cent, from 8.50 per cent.
Similarly, term deposit 2-3 years, 3-5 years and 5-10 years would also earn higher interest rate of 8.75 per cent.
However, the bank has left interest rate unchanged for deposits less than 1 year.
Earlier this month, the bank had cut lending rate by 0.05 per cent, soon after the Reserve Bank cut its key policy rates.
After this marginal reduction, SBI's base rate, or the minimum rate of lending, came down to 9.70 per cent from 9.75 per cent effective February 4.
In its third quarter policy review on January 29, RBI had lowered key short-term lending rate by 0.25 per cent and also injected Rs. 18,000 crore liquidity through similar reduction of Cash Reserve Ratio.
The repo rate, at which RBI lends to banks, was eased after a gap of nine months as the central bank fought the stubbornly high inflation through tight money policy, leading to high interest rate regime.