SBI hikes FD interest by 65bps, offers up to 6.75%

MUMBAI: State Bank of India has hiked retail term deposits by 65 basis points with effect from December 13. The best interest rate offered by the bank now stands at 7.25% for senior citizens while for others the highest rate is 6.75%.
The country’s largest bank has also increased its bulk deposit rates by as much as 100 basis points. This is the sharpest increase by the bank since the central bank started hiking interest rates in May 2022. In the last seven months, the RBI has increased deposit rates by 225 basis points.
Following the rate revision SBI offers 6.75% on deposits between one year to less than two years as against 6.1% earlier. On deposits two year to less than three years the bank offers 6.75% versus 6.25% earlier. Three to five year deposits now attract 6.25% as compared to 6.1% earlier. Senior citizens will get a return of 50 basis points over the standard rates.
The competition for deposits has picked up as growth in bank credit is racing ahead of deposit growth. While the growth in deposits as of November 18 stood at 9.6%, the banking sector’s advances have been growing at 17.2%. As against Rs 8.3 lakh crore of incremental deposits, banks have added Rs 10.6 lakh crore to their loan books.
Besides loan growth and competition from smaller banks, HDFC is also ramping up its deposit collection ahead of its forthcoming merger with the bank. The bank is offering 7.5% per annum on its sapphire deposits for 45 months.
The interest rate on these deposits can go up to 7.75% after taking into account the premium for senior citizens and further to 7.8% if the deposits are initiated online. Further if the depositor also owns HDFC shares, the return can go up to 7.95%. The scheme has mobilised Rs 10000 crore in less than two months of its launch on October 14.
While retail loans move up in line with the repo rate revision by the central bank, deposit rates are determined by the bank. IDBI Bank and Yes Bank are the only two lenders offering floating rate deposits to their customers.