SBI hikes interest rates on deposits by 50-150 bps

The State Bank of India (SBI) on Monday raised its deposit rates by 50-150 basis points with effect from December 7. The bank has, however, left lending rates unchanged. This means that depositors will earn more from their fixed deposits.Following the rate hike on fixed deposits, the cost of funds for the bank would rise and in the near future, the bank may hike its lending rates too. Last week, public sector lender ICICI Bank had also raised interest rates on fixed deposits of various tenors by 0.25-0.50 per cent.

The public sector lender sees no further increase in deposit rates till the end of the current fiscal.

SBI will offer a maximum interest rate of 8.75 per cent for deposits with maturity period of 8-10 years, marking an increase of 100 basis points.

The highest increase of 150 basis points will be in case of term deposits with maturity of 46-90 days. The depositors will earn an interest of 5.5 per cent as against existing 4 per cent.

Interest rate on fixed deposit with 181 days to less than one year maturity has been increased by 125 basis points or 1.25 per cent to 7.25 per cent against existing 6 per cent.