State Bank of India has reduced interest rates on bulk fixed deposits of Rs 3 crore and above by up to 25 basis points for short tenures, effective August 15, 2026. Additionally, the bank will charge Rs 15 plus tax for cash withdrawals in Basic Savings Deposit accounts beyond four transactions per month, starting October 1, 2026. These moves impact institutional cash management and small savings account holders.
The State Bank of India (SBI) has implemented changes to its bulk fixed deposit (FD) interest rates and transaction rules, affecting both institutional depositors and holders of Basic Savings Deposit (BSBD) accounts. These updates, effective mid-August 2026, reflect the bank's strategy to manage liquidity and operational costs in the current interest rate environment.
Bulk FD Rate Adjustments
For institutional and large-ticket depositors, the bank has reduced interest rates on domestic bulk fixed deposits, specifically those amounting to Rs 3 crore and above. The cuts are concentrated on shorter-term tenures, which are often used by businesses to park excess cash for brief periods. Deposits maturing between seven and 179 days now earn 25 basis points less, while those maturing between 180 and 210 days face a 10 basis point reduction.
Crucially, rates for bulk deposits with tenures ranging from 211 days to 10 years remain unchanged, allowing stability for longer-term corporate treasury investments. For general customers, these rates now range between 5.25% and 6.50%, while senior citizens see rates between 5.75% and 7%, depending on the duration. Retail fixed deposits, typically for amounts below Rs 3 crore, remain unaffected by this revision.
New Withdrawal Penalties and Fees
Beyond interest rate changes, the bank has tightened rules regarding liquidity and account transactions. A uniform 1% penalty is now applicable to all new and renewed bulk fixed deposits if they are withdrawn before the maturity date. This measure is intended to discourage the early liquidation of large-value deposits, providing the bank with greater certainty regarding its deposit base.
Furthermore, the bank has updated the service structure for Basic Savings Deposit accounts. Effective October 1, 2026, the bank will charge Rs 15, plus applicable Goods and Services Tax (GST), for each cash withdrawal at branches beyond the first four free transactions in a month. This policy aligns with broader efforts across the banking sector to balance the cost of maintaining accounts with the frequency of branch-based services.
Investor Context
These adjustments are significant for corporate treasuries and institutional investors who rely on bulk FDs for short-term liquidity management, as they will now see slightly lower yields on short-tenure investments. The 1% premature withdrawal penalty is a clear signal for investors to align their deposit tenures with their expected cash flow requirements, as early exit options have become costlier.
For general savers, the update to BSBD account charges highlights the importance of monitoring transaction frequency, particularly for those who frequently use physical branches for cash needs. The market will likely observe how these changes impact the bank’s total deposit growth and whether other lenders follow suit with similar adjustments to their bulk deposit or savings account policies in the coming quarters.