Bank Interest: Banks frequently offer new benefits to their account holders, yielding significant advantages. Two of the country’s major public sector banks—SBI and Bank of Baroda—have announced an increase in deposit interest rates. This move will benefit individuals who hold deposits with these banks.
Under the new rates, customers can earn up to 6 per cent interest on certain deposit schemes. This hike follows measures taken by the RBI to encourage foreign currency inflows, and the impact is expected to be substantial.
SBI’s Offer
The State Bank of India (sbi) has launched the ‘FCNR(B) Advantage Deposit Scheme’ for its customers. Under this scheme, interest rates of 5.25% for a tenure of 3 to 4 years, 5.50% for 4 to 5 years, and 5.75% for 5 years will be offered on deposit amounts up to $1 million. For deposits exceeding $1 million, a maximum interest rate of 6% will be available for a 5-year tenure.
Bank of Baroda Also Raises Interest Rates
Meanwhile, the public sector Bank of Baroda has also hiked interest rates on its FCNR(B) deposit schemes. The bank has implemented new rates for deposits held in US Dollars, British Pounds, Euros, Australian Dollars, and Canadian Dollars.
According to the bank, interest rates will go up to 6% for US Dollar deposits, up to 5.15% for Canadian Dollar deposits, and up to 4.75% for deposits in British Pounds and Australian Dollars. The banks note that the RBI has recently relaxed certain regulations regarding FCNR(B) deposits and foreign borrowings.
However, investors should also be aware of the rules regarding premature withdrawal. According to SBI, deposits cannot be withdrawn within the first year. If a withdrawal is made after one year but before three years, interest will be paid at a rate of 3.50%. For withdrawals made between three and five years, the interest paid will be 1% lower than the applicable rate. Following the hike in interest rates, FCNR(B) deposit schemes have become more attractive than before. This presents an opportunity to earn better returns, especially for those who hold savings in foreign currency.
