Interest rates on bulk term deposits increased
Posted on: 31/Jan/2018 2:31:04 PM
Interest rates have been hiked by the State Bank of India, SBI, on domestic bulk term deposits by as much as 140 basis points. This is the second hike in interest rates on bulk term deposits in a time span of two months.
Bulk term deposits for a tenor of 7 to 45 days have been increased by 50 basis points to 5.25 per cent per annum from 4.75. Deposits that mature between 46 days and two years will yield interest of 6.25 per cent every year. Those with a maturity period of two to ten years will have 6.00 per cent interest rate per annum.
A senior executive at SBI said, The rate of interest paid to senior citizens on term deposits of Rs 1 crore or more has also been increased. For 7 to 45 days, they will be paid 5.75 per cent interest per annum, 6.75 for 46 days to two years, and 6.50 for two to ten years. With this hike, now bulk deposits with SBI will offer as much interest rate as the retail term deposits. Interest rates on retail term deposits have been kept unchanged. The increase in bulk term deposits interest rates is a realignment of rates as the competing banks were offering better interest rates on term deposits. The hike will not have any significant impact on SBI`s cost of funds as the portion of bulk deposits against total deposits with the bank is quite small.
