SBI hikes rates on short-to-medium term fixed deposits by up to 25 bps

State Bank of India has hiked interest rates on its retail fixed deposits for short to medium term by up to 25 bps with effect from May 28, 2018.

However, the revision has been only on the FDs of a few select terms. A term deposit of less than Rs 1 crore for a period of 1 year to less than 2 years will now fetch an interest of 6.65 percent as against 6.40 percent earlier. For 2 years to less than 3 years of time period, the interest has now been revised to 6.65 percent compared to 6.60 percent.

Source: SBI website

The rates have been kept the same for deposits above Rs 1 crore.

This could be an indication that the lending rates could also rise.

India’s biggest bank had earlier hiked deposit rates in March by 10-25 bps for deposits of over two years for retail customers and also in 1-2 years category for deposits over Rs 1 crore.

SBI's deposit rate hike also sets the path for raising lending rates as typically the loan rates follow the deposit rates.

The interest rate payable to SBI staff and SBI pensioners will be 1 percent above the applicable rate. The rate applicable to all senior citizens and SBI pensioners of age 60 years and above will be 0.50 percent above the rate payable for all tenors to resident Indian senior citizens, SBi said on its website.

On February 28, SBI had hiked its retail and wholesale deposit rates by 10 to 50 bps across various maturity baskets.

A few days later, on March 1, SBI had also raised its marginal cost-based lending rates (MCLR) by 10-25 basis points across most maturities, with immediate effect.