The State Bank of India (SBI) on Monday hiked the interest rates by 10 basis points on fixed deposits.
The 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.
Below are the revised rates. The first table is for individuals below 60 years of age and the second ones for senior citizens.
| Tenors |
Existing for Public w.e.f. 28.05.2018 |
Revised For Public w.e.f. 30.07.2018 |
| 7 days to 45 days |
5.75 |
5.75 |
| 46 days to 179 days |
6.25 |
6.25 |
| 180 days to 210 days |
6.35 |
6.35 |
| 211 days to less than 1 year |
6.40 |
6.40 |
| 1 year to less than 2 year |
6.65 |
6.70 |
| 2 years to less than 3 years |
6.65 |
6.75 |
| 3 years to less than 5 years |
6.70 |
6.80 |
| 5 years and up to 10 years |
6.75 |
6.85 |
| Tenors |
Existing for Senior Citizens w.e.f. 28.05.2018 |
Revised for Senior Citizens w.e.f. 30.07.2018 |
| 7 days to 45 days |
6.25 |
6.25 |
| 46 days to 179 days |
6.75 |
6.75 |
| 180 days to 210 days |
6.85 |
6.85 |
| 211 days to less than 1 year |
6.90 |
6.90 |
| 1 year to less than 2 year |
7.15 |
7.20 |
| 2 years to less than 3 years |
7.15 |
7.25 |
| 3 years to less than 5 years |
7.20 |
7.30 |
| 5 years and up to 10 years |
7.25 |
7.35 |
"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, while it awaits more data on the impact of minimum support price for farmers, according to economists.
The recent agreement between Europe and the US to move toward a zero tariff situation will also be a relief on the trade war front. The MPC meeting will begin on July 31 and the decision will be unveiled on August 1.
"It's a close call and a tough balancing act, but we expect RBI to tilt in favour of a 'hold' when it meets next week for the monetary policy review," Abheek Barua, chief economist at HDFC Bank, said. Stabilisation in the rupee in the recent weeks and moderation in oil prices could also be pointed out by the RBI as somewhat comforting.
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