State Bank of India (SBI) on Friday raised interest rates on one category of domestic bulk term deposits by 50 basis points (bps) to 5.25% for deposits of Rs 2 crore and above. The interest rates are raised on deposits with tenure between 1 year and less than 2 years, as per information on the lender’s website.
The bank has kept the interest rates on domestic bulk term deposits of other tenures unchanged. For shorter term deposits of less than 1 year the interest rates offered by the bank remain in the range of 3.50% to 4.50% while rates for deposits with tenures between 2 and 10 years are in the range of 4.25% to 4.50%.
SBI last month raised interest rates on some retail domestic term deposits by 15 to 20 basis points. The deposit growth in the banking system has been steadily increasing, with total deposits with lenders at Rs 169.6 trillion as on fortnight ended July 1, which grew by 9.77% on year. Typically, term deposit growth tends to follow the movement in market interest rates. With the RBI raising policy rates, analysts expect term deposit growth to improve going ahead.