In less than a month State Bank of India for the second time hiked rates on fixed deposits of up to two years maturity. The hike was announced on Thursday.
The hike in interest rates will come into force with immediate effect and range is between 0.5 and one percentage point. The bank has increased the interest rates by changing the time slab in its fixed deposit program.
A senior official from SBI told that the hike in rate has been brought on the demand from retail investors. “We are assessing our customers’ needs, especially retail customers, and therefore decided to offer higher rates,” he said.
In 2007 on December 12, SBI had increased the rates on deposits of one year to 549 days and on deposits of 551 days to less than two years by 25 basis points.
At that time officials had said the bank was concentrating on short term deposits in order to reduce its deposit costs. For senior citizens, the interest on deposits for the time period of one year to less than 2 years the interest is 9 .25 per cent and of tenure above 2 years and up to 10 years interest is 9 per cent.