The bank is offering depositors a rate of interest of 7.40 per cent under the ‘sarvottam’ term deposits for a tenure of two years. For a one-year tenure, the deposit rate is 7.10 per cent. No other tenures are available for this deposit scheme.
Senior citizens will get an additional 50 basis point (bps) premium over the rate of interest provided to general depositors. They will earn 7.90 per cent and 7.60 per cent rate of interest for a two-year deposit and one-year deposit, respectively.
Deposits above Rs 15 lakh but less than Rs 2 crore are subject to the above deposit rates. Deposits between Rs 2 crore and Rs 5 crore can also be deposited under this program, with a marginally lesser rate of interest.
The rates are effective as of February 15, 2023.
What Is Non-Callable Deposit
The scheme does not permit premature withdrawal, hence the name non-callable. According to the Reserve Bank of India (RBI), banks can offer higher interest rates on deposits if customers do not withdraw prematurely.
Generally, most deposits with a callable feature allow premature withdrawal with a penalty. With its ‘sarvottam’ deposits, SBI is offering a higher rate of interest than that offered on Public Provident Fund (PPF), National Savings Certificate (NSC), and other post office deposit schemes.
That said, the ‘sarvottam’ scheme isn’t an easy choice because of the tax benefits and liquidity the other alternative schemes offer.
Incidentally, many banks have raised their fixed deposit rates in the wake of the consecutive hike in repo rate by the RBI. These include specific deposits for seniors as well, which typically offer 25-50 bps higher than those offered to other depositors.
Rates At SBI
SBI had earlier increased its fixed deposit rates by 5 bps to 25 bps on different categories.
While increasing FD rates for general deposits (maturing in 2-3 years) to 7 per cent from the previous 6.75 per cent, the bank increased the same rate (25 bps) for deposits made by senior citizens.
Compared with earlier rates of 7.25 percent, senior citizens now receive 7.50 percent for the same tenure.
SBI is now offering seniors a comparable rate of 7.50 per cent on fixed deposits for 5-10 years with its “SBI Wecare” deposit scheme. For a 400-day tenure deposit, SBI offers seniors 7.60 per cent.
Senior citizens previously enjoyed a rate of 6.50 per cent on deposits with three-five year tenure. This rate has been revised to 6.75 per cent.
For general deposits maturing from three years to 10 years, the rate was increased to 6.50 per cent from 6.25 per cent.
