Axis Bank And SBI Hike Interest Rates For Fixed Deposits

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posted on 10 months ago — updated on 1 second ago

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State Bank of India has increased their interest rates by 50 basis points for various tenures.

Fixed Deposits (FDs) are widely recognised as a secure investment avenue with relatively low interest rates and a strong safety record. Recent reports indicate that both Axis Bank and the State Bank of India (SBI) have decided to raise their interest rates on Fixed Deposits, attributing this move to the Reserve Bank of India’s (RBI) decision to increase the repo rate.

The Axis Bank and SBI have reportedly increased their FD interest rates by 50 basis points across various tenures. Notably, the SBI has raised the deposit rate for retail term deposits maturing between 7 to 45 days from 3 per cent to 3.5 per cent. For deposits maturing between 46 to 179 days, the interest rate has been increased to 4.75 per cent from the previous 4.5 per cent.

Furthermore, deposits with maturities ranging from 180 to 210 days will now earn an interest rate of 5.75 per cent, up from 5.25 per cent. Similarly, for deposits maturing between 211 days and one year, the increased rate is set at 6 per cent, compared to the earlier 5.75 per cent. Additionally, Fixed Deposits maturing between 3 to 5 years have seen a 25 basis points increase, reaching 6.75 per cent, up from 6.5 per cent.

Meanwhile, the Axis Bank is reportedly offering FD rates to the general public, covering term deposits maturing between 7 days to 10 years. The reported rates span from 3.5 per cent to 7.1 per cent.

SBI Chairman Dinesh Khara commented on the development, stating, “We had not increased the interest rate for some time in shorter terms. We had some elbow room available, so we have only calibrated rates.” He added, “In longer tenors, we had already increased some time back, so there is no elbow room to increase them further.”

In addition to Axis Bank and SBI, other banks, including Bank of India, DCB Bank, Kotak Mahindra, and Federal Bank, have also raised their interest rates this month. These adjustments come in response to changes in the economic landscape, reflecting the impact of the RBI’s decision to increase the repo rate and signalling potential shifts in the broader financial environment.