State Bank of India (SBI) on Wednesday raised retail deposit rates by 10 to 50 basis points across various maturity baskets, a move that may have to be followed by the banking system.
One basis point is a hundredth of a percentage point.
In an announcement on its website, the country’s largest bank said, effective Wednesday, 7- 45-day deposits will earn an annual interest rate of 5.75 per cent, from 5.25 per cent earlier. Deposits for one year will now earn 6.40 per cent, against 6.25 per cent earlier, while those maturing between two years and 10 years will earn 6.50 per cent, compared with 6 per cent earlier.
Senior citizens will, accordingly, earn 7 per cent on their deposits, up from 6.50 per cent earlier.
“The proposed rates of interest shall be made applicable to fresh deposits and renewals of maturing deposits,” SBI said in its notification.
SBI has also raised its interest on bulk deposits above Rs 10 million.
A deposit rate hike is usually followed by a lending rate hike. This indicates that the interest in the economy has moved up even as the Reserve Bank of India (RBI) in February kept its policy rates unchanged for the third time.business-standard