SBI hikes interest on fixed deposits

NEW DELHI: State Bank of India (SBI) on Monday hiked the interest rates by up to 10 basis points on fixed deposits. The new rates will be effective from July 30. On fixed deposits below Rs 1 crore, interest rates have been raised between 5 basis points-10 basis points. It is to be noted that one basis point is equal to 0.01 per cent.

For the senior citizens, the new rate is 7.2 per cent from 7.15 per cent earlier. For the investments from 2 years to 3 years, the interest rate is revised to 7.3 per cent from 7.15 per cent.

"The proposed rates of interest shall be made applicable to fresh deposits and renewals of maturing deposits. The interest rates on "SBI Tax Savings Scheme 2006(SBITSS)" Retail Deposits and NRO deposits shall be aligned as per the proposed rates for domestic retail term deposits. However, NRO deposits of Staff are not eligible for additional 1% interest otherwise applicable to staff domestic retail deposits, these rates of interest shall also be made applicable to domestic term deposits from Cooperative Banks," SBI said.

SBI has revised the rate just before the Reserve Bank of India is scheduled to have its bi-monthly policy meet. The RBI meeting will happen on August 1.

According to the latest Reuters poll, thirty-seven of 63 economists said that the RBI will raise key interest rates again in August and 22 respondents said the next rate hike would come by end-2018 or in the January-March quarter next year.

Softening of inflation expected in July going up to November, due to the base effect and lower oil prices, may allow the Reserve Bank of India's (RBI) monetary policy committee (MPC) to hold rates.