Friday, August 18 2006 17:16 Hrs (IST) - World Time -

Mumbai: Within days of increasing prime lending and consumer loan rates, India's leading bank SBI today (Aug 18, 2006) announced a hike in interest rates on fixed deposits by up to 0.5 per cent a move that is likely to be followed by others.

As per the revised rates, to come into effect tomorrow, fixed deposits would now attract a maximum of 8.5 per cent interest under super saver term deposit for senior citizens followed by 8 per cent interest under the same scheme for others.

The revision in rate comes less than a month of Reserve Bank hiking its short term transaction rates with banks (repo and reverse repo rates) by 0.25 per cent during the first quarter (2006-07) review of the credit policy that led to announcement by banks to increase their lending rates.

Under the new dispensation, fixed deposits would now get a maximum interest of 7.25 per cent, while senior citizens would get a higher rate of 7.75 per cent for deposits of five years to ten years.