The country’s largest lender, the State Bank of India, on Tuesday announced it would raise interest rates by 40 to 90 basis points on several large term deposits.
The revised interest rates on large term deposits of ₹2 crore and above will take effect Tuesday, the bank said.
While the interest rate on deposits with a maturity between 7 and 45 days was left unchanged at 3%, deposits with a maturity between 46 and 179 days now earn interest at 3.50% compared to 3% previously.
The public sector lender also revised the rate on large term deposits with maturities of 180 to 210 days by 40 basis points to 3.50% from 3.10% previously, according to the bank’s website.
Deposits maturing between 211 days and less than 1 year earn interest at 3.75%, up 45 basis points from 3.30%.
The interest rate on retail deposits with maturities between 1 year and less than 2 years was increased by 40 basis points to 4%. For deposits with a maturity of 2 to less than 3 years, the interest rate was raised by 65 basis points to 4.25%.
The interest rate on large term deposits for 3 years and up to 10 years was increased by 90 basis points to 4.50% from 3.60%.
Last week, the Punjab National Bank announced that it had increased interest rates on term deposits in select buckets by up to 60 basis points from May 7th.
The new fixed deposit rates will apply to deposits up to £10m, PNB said.
The hike in deposit rates by banks followed a surprise 40 basis point hike in the repo rate to 4.40% on May 4th by the Reserve Bank of India (RBI).
An increase in the repo rate by the RBI gives banks scope to raise their deposit rates, which in turn gives depositors an opportunity to earn higher interest rates on their money parked at banks.
On Monday, several banks including HDFC Bank, Canara Bank, Bank of Maharashtra and Karur Vysya Bank revised their lending rates based on the marginal cost of funding and the repo rate.
Meanwhile, Bajaj Finance, the lending and investment arm of Bajaj Finserv, announced on Tuesday that it had increased interest rates on term deposits by up to 10 basis points for maturities between 36 and 60 months.
The revised interest rates on FDs (fixed deposits) of up to £5 billion will be effective from 10 May 2022 and will apply to new deposits and rollovers of maturing deposits, the company said in a press release.
After the revision, deposits offer a cumulative return of up to 7% for the period from 36 months to 60 months. Seniors can benefit from up to 0.25% higher FD rates, which offer a guaranteed return of 7.45% over 44 months, the press release said.