Mumbai: Within days of increasing prime lending and consumer loan rates, India's leading bank SBI on Friday announced a hike in interest rates on fixed deposits by up to 0.5 per cent - a move that is likely to be followed by others.
As per the revised rates, to come into effect on Saturday, fixed deposits would now attract a maximum of 8.5 per cent interest under super saver term deposit for senior citizens followed by 8 per cent interest under the same scheme for others.
The revision in rate comes less than a month of Reserve Bank hiking its short-term transaction rates with banks (repo and reverse repo rates) by 0.25 per cent during the first quarter (2006-07) review of the credit policy that led to announcement by banks to increase their lending rates.
Under the new dispensation, fixed deposits would now get a maximum interest of 7.25 per cent, while senior citizens would get a higher rate of 7.75 per cent for deposits of five years to ten years.
As per the latest revision, the second time since May 1, SBI would give an interest rate of 7 per cent, up from 6.50 per cent, for deposits of three to five years.
Similarly, for term deposits maturing in between one to three years, the interest rates have been increased by 0.50 per cent to 6.75 per cent.
However, term deposits of less than one year would be eligible for a hike of only 0.25 per cent.
Deposits of more than Rs 1 crore maturing in between seven to fourteen days would invite an interest of 3.50 per cent, an increase of 0.50 per cent.
For senior citizens, the interest rates on fixed deposits have been hiked by 0.50 per cent for maturities ranging between one to five years.
The revised interest rate on Super Saver Term Deposit will come into effect from August 19. The tenure for this is in between 6 to 10 years.
Under the plan, interest on term deposits of less than Rs 1 crore has been hiked to 7.25 per cent, up 0.25 per cent, while for deposits of more than Rs 1 crore rates have been increased by 0.50 per cent to 8 per cent.
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