SBI hikes rates for deposits

The country's largest bank, State Bank of India, has increased its fixed deposit rates by up to 1.5 percentage points across maturities. HT reports.

The country's largest bank, State Bank of India (SBI), has increased its fixed deposit rates by up to 1.5 percentage points across maturities.

HT Image

"The bank revises upwards the deposit rates, effective from August 17, 2010. The increase is 25-150 bps in various maturities," SBI said in a filing to the Bombay Stock Exchange.

The bank increased interest rate by 1.5 percentage points to 4 per cent per annum for term deposits with maturity between 15 and 45 days. This is the biggest hike among term deposits of various maturities.

For fixed deposits of maturity from 181 days to less than 1 year, the new interest rate will be 6 per cent, and for 555-day deposits, 7.25 per cent.

The yield on term deposits between 3 years and 5 years maturity will go up by 0.75 percentage points to 7.25 per cent from Tuesday, while 5-8 year deposits will yield 7.50 per cent.

The bank has also launched a floating-rate term deposit product linked to its base rate. It is the first bank to offer base rate-linked term deposit products. Base rate is the lowest lending rate below which the bank cannot give loans.

For one-year deposits, the floating yield interest rate will be 50 basis points lower than the existing 7.5 per cent base rate. Three-year term deposits will yield interest at 25 basis points lower than the base rate, and 5-year deposits at the base rate.