Bank of Baroda hikes interest rates on domestic retail term deposits raised by 125 basis points

29 Dec 2023 , 10:04 AM

On December 28, the public sector lender Bank of Baroda announced that, effective December 29, 2023, interest rates on domestic retail term deposits, including NRO (Non-Resident Ordinary) term deposits, would be revised upward by up to 125 basis points.

The bank specified that these rates are applicable to deposits under Rs 2 crore in its regulatory filing.

‘The decision to increase retail term deposit rates underscores Bank of Baroda’s commitment to offering higher value to our customers while strategically managing our deposit portfolio,’ stated Ravindra Singh Negi, Chief General Manager of Retail Liabilities & NRI Business at Bank of Baroda. In our opinion, this move will not only help the bank optimize its cost of deposits and attract more clients as they increase the value of their savings, but it will also protect our net interest margin.

Another public sector lender, SBI, increased deposit rates on December 27 by as much as 50 basis points, effective immediately. The SBI website has been updated with data on interest rates on fixed deposits (FDs) for amounts less than Rs 2 crore.

SBI has raised interest rates on deposits maturing in seven to forty-five days by fifty basis points (bps).

These deposits will now yield an interest rate of 3.50% for 46 to 179 days, with a guaranteed 4.75%, following a 25 basis point rate hike by the bank.

Interest rates on term deposits with a 180–210 day tenor have been increased by 50 basis points by SBI. These FDs will now offer an interest rate of 5.75%. The bank raised rates for tenors less than a year by 25 basis points (6 percent) on 211 days. FDs with maturities of three years or fewer will now yield a bonus of twenty-five basis points, or 6.75%.

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