On the occasion of Independence Day, State Bank of India announced a new fixed deposit scheme with a tenor of 1,000 days. The rates will be effective from August 15, 2022 for 75 days.
Promoted as Utsav Deposit ('celebratory deposit' in English), the scheme enables customers to earn extra on their fixed deposits. The usual FD, for the same tenor at SBI gives a return of 5.5 percent, as per the latest rates revised on August 13.
In other words, the difference in rates between the regular term deposit and Utsav Deposit is 60 (6.10-5.50) basis points.
According to the rates of interest revised on August 13, one can earn 5.45 percent on deposits of tenor between one to less than two years. This further rises to 5.5 percent in case of loans of tenor between two to three years. This rises to 5.6 percent for loans of tenor 3-5 years and 5.65 percent for loans of tenor 5-10 years.
Just as regular fixed deposits, Utsav Deposit offers an extra half percentage per annum for senior citizens.
It is vital to mention here that most commercial banks have been raising their term deposit rates ever since the banking regulator raised its repo rates by 50 basis points on August 5 to 5.4 percent.
The banks which have raised their FD rates in the past couple of weeks include State Bank of India, Canara Bank, ICICI Bank, Indian Bank, Bank of Baroda and DBS Bank, among others.
Other term deposit variants
The state lender, from time to time, tends to launch different variants of term deposits. Another variant is known as multi open deposits.
These multi option deposits are term deposits linked to the savings or current account and unlike normal term deposits, which are fully liquidated anytime you need funds, depositors are entitled to withdraw from a MODS account in multiples of ₹1,000 as per need. And the remainder account will continue to earn the term deposit rates applicable.
In this minimum period of deposit is one year while the maximum period of deposit is five years and minimum term deposit amount for MOD is ₹10,000 and there is no maximum term deposit amount.
