After announcing the creation of 1000-day Fixed Deposit giving an interest rate of 10.5%, State Bank of India has proved its aggressiveness in taking lead over others in garnering public funds.
Until a few years ago, FD rates were quoted in either number of months or years, but ICICI Bank took the initiative to launch specific days FD with launch of 390/ 590/ 890 days FD.
With the turmoil in US financial market and its impending effect on India, Indian customers are now more inclined to invest in public sector banks rather than private sector or foreign bank, as such the new scheme may prove to be a hit in today’s times.
When compared with other banks, the 10.5% interest rates looks attractive as no other public sector bank is offering more than 9.75% for a period during 2 years to 4 years.
Among private and foreign sector banks, only TamilNadu Mercantile Bank offers10.5% for period 1-3 years.
The rates for short term duration though may be higher among private sector bank with Kerala Based Catholic Syrian Bank offering 10.7% for 1 year period.