New Delhi: The country’s largest lender State Bank of India (SBI) on Monday raised deposit rates by up to 150 basis points (bps) across various maturities, a move that will provide better returns to people with fixed deposits in the bank. A basis point is one-hundredth of a percentage point.
The new rates will become effective on Tuesday.
The decision comes close on the heels of various private and public sector lenders, including ICICI Bank Ltd, Punjab National Bank, Syndicate Bank and Bank of India, raising their deposit rates.
The Reserve Bank of India has raised key policy rates six times this year in an attempt to cool inflation.
SBI, according to a statement, will offer a maximum interest rate of 8.75% for deposits with a maturity period of 8-10 years, marking an increase of 100 basis points.
The highest increase of 150 basis points will be in case of term deposits with maturity of 46-90 days. Depositors will earn interest of 5.5% as against the existing 4%.
The SBI decision to raise fixed deposit rates will prompt other lender to hike their rates in competition for savers’ money. ICICI Bank had earlier raised interest rates on fixed deposits of various tenors by 0.25-0.50%.