SBI FD interest rates: SBI raises FD interest rates by up to 20 bps for these maturities

The State Bank of India (SBI) has raised interest rates on fixed deposits (FD) over certain tenors by up to 20 basis points (bps), effective June 14, 2022 for deposits below Rs 2 crore

According to the SBI website, the bank raised the interest rate on FDs with maturities ranging from 211 days to less than one year by 20 basis points to 4.60%. For 1 year to less than 2 years, the interest rate offered was increased to 5.30% from 5.10%. And the interest rate was raised by 15 basis points on 2 years to less than 3 years FD to 5.35% against 5.20%

Latest SBI FD Interest Rates

Source: SBI website

Senior FD

The rate applicable to all SBI seniors and retirees aged 60 and above will be 0.50% higher than the rate applicable to senior Indian residents for all ages.

Seniors will earn 5.10% for terms ranging from 211 days to less than a year. The bank will offer 5.80% over 1 year to less than 2 years. From 2 years to less than 3 years, it will offer 5.85% after the ride.

Banks offering the highest interest rates on 2-year senior FDs

RBI raises its repo rate

The repo rate has now been raised by 0.50% by the RBI at its monetary policy meeting on June 8, 2022, bringing the total hike to 0.9% in just 36 days. This evidently indicates that the best days have now arrived for fixed deposit (FD) investors, who have seen FD interest rates fall by 40% over the past six years from the all-time high of 9% offered by SBI in September 2014 to 5.4%. in May 2020.

Suggested interest rates will apply to new deposits as well as renewals of maturing deposits. Interest rates on retail deposits and NRO deposits under the “SBI Tax Savings Scheme 2006(SBITSS)” would be tied to projected rates for domestic retail term deposits.

The SBI had last raised FD interest rates in February 2022. Effective 15 February 2022, the SBI had raised interest rates for FD tenors of more than two years by 10 to 15 basis points basic.

Good news for FD investors

The Reserve Bank of India (RBI) raised repo rates by 50 basis points at its monetary policy meeting on June 8, 2022. This brings the total rate hike by the central bank to 90 basis points in just over one month. More banks are expected to raise FD rates in the coming months, which is good news for FD investors.

These banks offer the highest interest rates on 5-year FDs

What is an FD?

A fixed deposit, often referred to as FD, is a type of investment instrument offered by banks and non-bank financial institutions (NBFCs). You invest for a certain period of time and also receive a fixed rate of interest with FDs, you will also receive fixed returns regardless of how interest rates fluctuate or how the economy performs at the time of the investment. investment.

How to adjust your FD scale in the current situation

Doing an FD ladder is an option as it helps you to split a large deposit into multiple parts and reserve each part after a time interval to get the average return and periodic liquidity in case of interest rate volatility. However, it is important to choose the right tenure and deposit frequency. In a rising rate scenario, it is essential to keep the duration and the spread between the deposits low so that the deposit benefits quickly from the rising rates at maturity. These can be gradually increased to complete a stable scale.

For example, if you have Rs 10 lakh, you can make the first FD of Rs 2.5 lakh for six months, then a second FD of Rs 2.5 lakh for 9 months and so on. Once your first FD matures you can increase the tenure to 2 years and after that once the second FD matures you can keep the tenure 2 years 3 months and so on. Once these FDs start to mature, you increase the tenure to 3 years and increase the gap between the two FDs to 9 months.

Create an FD ladder to maximize returns from rising interest rates

Create an FD ladder to maximize returns from rising interest rates

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