State Bank of India (SBI) has raised interest rates on fixed deposits (FDs) by up to 50 basis points across various tenors. 

The new rate, applicable on FDs below Rs 2 crore, is effective from today. 

SBI’s decision to raise interest rates on retail term deposits could trigger a similar move from other banks.

For deposits maturing between seven days to 45 days, SBI has raised the interest rates by 50 basis points (bps) to 3.50%, from 3% earlier. For 46 days to 179 days maturity, the bank has increased rates by 25 bps to 4.75%. 

The new rate for deposits maturing between 180 days to 210 days is 5.75%, up from 5.25% earlier.

The bank has increased by 25 bps to 6% on deposits maturing between 211 days to less than 1 year.

FDs maturing between three years to less than five years will now earn 6.75% interest rate, up from 6.5% earlier.

The bank has left the interest rates unchanged on FDs maturing between one year to less than two years (6.8%); two years to less than three years (7%); and five years to ten years (6.5%). 

The bank has also increased interest rates on domestic bulk deposits (Rs 2 crore and above) by up to 50 bps, effective 27 December.

SBI has become the fifth bank to increase interest rates on term deposits in December 2023. Bank of India, Federal Bank, Kotak Mahindra Bank, and DCB Bank are the other four banks who have raised interest rates on their term deposits this month.

SBI had last revised FD rates in February 2023.

Earlier this month, SBI raised its marginal cost of fund-based lending rate (MCLR) by 5-10 bps across different tenors. MCLR is the minimum interest rate below which banks cannot lend.

Since May 2022, the RBI has raised the repo rate – the key policy rate – by 250 bps to 6.50%.