Finally! SBI hikes fixed deposit rates by 5 bps to 10 bps, but there's a big catch for you

While every other bank including HDFC Bank, ICICI Bank and Axis Bank were hiking their fixed deposit rates, the spotlight was squarely on the largest lender State Bank of India (SBI) and pressure mounted on it to follow suit. However, SBI did not flinch for a long while, and in quite a surprise,  the bank finally hiked its fixed deposit rates. SBI FD interest rate stands hiked in the range of 5 basis points to 10 basis points on selective tenures. Interestingly, even as there is joy of seeing SBI's new higher FD rates, unfortunately, there's a catch too. SBI FD rates have been hiked only for two types of tenure, while other remaining interest rates are same as before. The last time SBI has hiked FD rates were in the month of July, 2018.

 Let's check here the new SBI fixed deposit rates: 

It was only 1 year to less than 2 year tenure that saw FD rates going higher by 10 basis points. Hence, a regular citizen can make deposits at SBI and earn 6.80% interest per annum. Earlier, this tenure had interest rate of 6.70%. 

Another tenure 2 years to less than 3 years, where a customer will also earn interest of 6.80% from SBI on their FDs. The interest on this tenure was 6.75%. 

Once again senior citizens will benefit more from new SBI FD interest rates.

For 1 year to less than 2 year tenure and 2 years to less than 3 years tenure, a senior citizen will earn interest rate of 7.30% each on their FDs. Earlier these two tenure had interest rate of 7.20% and 7.25% respectively. 

Notably, all the other remaining tenures, have seen no change in interest rates. 

It needs to be noted that,  interest rate payable to SBI Staff and SBI pensioners will be 1.00% above the applicable rate. The rate applicable to all Senior Citizens and SBI Pensioners of age 60 years and above will be 0.50% above the rate payable for all tenors to resident Indian senior citizens i.e. SBI resident Indian Senior Citizen Pensioners will get both the benefits of Staff (1%) and resident Indian Senior Citizens (0.50%).

Further, 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.