RBI has come out as a saviour for citizens today! It has not only taken care of loans, but also deposits invested by them. RBI cut repo rate by 25 basis points and RBI hiked the lowest deposit ceiling by a bank to Rs 2 crore. Every bank announces the interest rate for term deposit on three amounts namely below Rs 1 crore, up to Rs 5 crore and above. What RBI has done is that, now banks will give you interest rate for deposits made below Rs 2 crore and not Rs 1 crore as was applicable earlier. In short, one can expect to enjoy good returns on their investment now. Hence, this changes the situation for bulk depositors. 

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RBI in its press release said, "With a view to enhancing the operational freedom of banks in raising deposits, it is proposed to revise the definition of bulk deposits as single rupee deposits of Rs 2 crore and above."

Henceforth, RBI says, "Banks shall maintain their bulk deposit interest rate cards in the core banking system for supervisory review."

In terms of extant instructions, banks have been given discretion to offer differential rate of interest on the bulk deposits as per their requirements and Asset-Liability Management (ALM) projections. The instructions in this regard, last reviewed in January 2013, defined “bulk deposits” as single rupee deposits of Rs 1 crore and above. 

Recently, a CRISIL report highlighted that, bank credit in India will grow at a pace of 13-14% on average between fiscal FY19 - FY20, significantly faster compared with the 8% seen in fiscal 2018, which would force a change in the deposit mobilisation plans of banks over the medium term.

To meet this credit growth,  CRISIL says, “Banks will have to raise about Rs 25 lakh crore over the two fiscals. While Rs 5-6 lakh crore is expected to become available through the release of statutory liquidity ratio (SLR) funds, ~Rs 20 lakh crore would need to be raised through fresh deposits.”

Hence, RBI's this move definitely comes as a good news for both banks and depositors. 

Here's a list of latest interest rates offered by banks for deposits below Rs 1 crore - SBI vs HDFC Bank vs ICICI Bank vs BoB.

State Bank of India FD rates:

Short-term deposits: The bank is currently offering interest rates between 5.75% to 6.40% annually on these products. The tenure of these FDs is between seven days and one year. 

Medium-term deposits: They come with a minimum lock-in period of one year and offer rates between 6.4% and 6.7%. 

Long-term deposits: FDs with a tenure between 5 years to 10 years offer a rate of interest at 6.85% per annum.

HDFC Bank FD rates:

If the tenure of the FD is between 7 days and 90 days, HDFC offers 6.25%. For 91 days to one year, the lender offers 7.3%. It offers 7.4% interest if the tenure is between two to three years. For FD between three to five years, the bank offers an interest rate of 7.25%. For long term deposits with maturity between five to ten 10 years, the bank offers 7.25% interest rate.

ICICI Bank FD rates:

ICICI Bank's short term FD deposit comes with a maturity period of seven days to 45 days during which it offers 5.50%. For 46-184 days 6.25%, 185-289 days 6.50% and 290 days to less than 1 year 6.40%. It offers 7.25% interest if the investment is made for two to three years. If the maturity period is between three to five years, the rate is 7.25% and if the investment is made for five to ten years, the rate is 7%. 

Bank of Baroda FD rates:

For FDs with maturity period 15 days to 1 year, BoB is offering a 6.7% interest rate. If the investment is made for one to two years, the lender offers 6.80% interest. On maturity between two and five years, BoB is offering a 6.70% interest rate. BoB offers an interest rate of 6.7% on FDs with maturity between 5 years and 10 years.

RBI will be issuing a guidelines by end of February 2019, hence further clarity in terms of interest rate will be seen.