NewDelhi: A few days after the State Bank of India (SBI) decision to raise FD rates, the Bank of Baroda (BoB) announced a hike in interest rates on fixed deposits (FDs) across various maturity periods. The decision is effective from December 29, 2023.
BoB disclosed that interest rates on term deposits up to Rs 2 crore will witness an increase ranging from 10 basis points to a significant 125 basis points across different maturity brackets.
The most substantial rise of 125 basis points is implemented in the 7-14 days maturity bucket, elevating the interest rate from 3 percent to 4.25 percent.
Following closely is the 15-45 days maturity period, enjoying a 100 basis point surge to 4.50 percent. Notably, the rate hikes primarily target shorter-term maturity periods, specifically those under 1 year.
BoB emphasized the benefits for depositors opting for shorter maturities while aligning with the bank’s strategy to enhance its share of shorter-term retail term deposits.
The bank clarified that this move is pivotal for achieving a balance and optimization of the overall cost of deposits, safeguarding its Net Interest Margin (NIM). BoB views the adjustment as a strategic step in catering to the needs of depositors and ensuring a competitive edge in the market.
Bureau Report
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