SBI Revises Fixed Deposit (FD) Interest Rates

sbi revised interest rates

Question: Consider the following statements about SBI Fixed Deposit policy:

  1. For FDs with maturity of 1-2 years new interest rate is 6.70%
  2. On FDs for 5-10 years interest rate is 6.75%
  3. New rates are effective from 30 July.

Of the above the correct statements is /are:
(a) Only 1&2
(b) Only 2&3
(c) Only 1
(d) Only 1&3
Answer: (d)
Related facts:

  • On 28 July India’s largest Public Sector bank SBI (State Bank of India) has revised the interest rates on Fixed Deposits by 5-10 basis points. These new rates are applicable from 30 July on Fixed Deposit (FD) of less than 1crore.
  • SBI has increased the interest rate on FD with maturity of more than one year. The bank is offering interest of 6.70% on FD having maturity of 1-2 years which was earlier 6.65%. At the same time, the bank is paying interest rate of 6.75% on the FD of 2-3 year, which was earlier 6.65%.
  • In addition, the bank is paying interest of 6.80% on deposits for 3 to 5 years (earlier 6.70%). On FD for 5-10 years, the bank is now paying interest of 6.85% (earlier 6.75%).
  • Interest rate on State Bank’s Tax Saving Deposit has also been raised. Earlier on this type of FD the interest rate was 6.75%, and it is 6.85%.
  • For Senior Citizens, interest rate of 7.20% is given for FD for 1 to 2 years (earlier 7.15%). On FD for 2 to 3 years 7.25% (earlier 7.15%), for 3 to 5 years 7.30% (earlier 7.20%). Apart from this, interest rate on deposits of more than 5 years is 7.35%.

About Fixed Deposit (FD):

  • Fixed Deposit is a type of financial contract serviced by the banks /NBFCs in which the respective bank provides interest on the particular deposit which is usually greater than the normal saving deposits, until the given maturity date. The period can vary from 7 days to 10 years.
  • It is known as Term or Time Deposit in Canada, Australia, New Zealand, and the US and as bond in the United Kingdom and India.
  • There is no effect on fixed deposit by market fluctuations which ensure greater safety to the investment capital.

References-
https://www.sbi.co.in/portal/web/interest-rates/domestic-term-deposits
https://www.timesnownews.com/business-economy/personal-finance/planning-investing/article/sbi-increases-interest-rates-on-fixed-deposits-of-more-than-one-year/261754