According to a senior official, the State Bank of India (SBI) is targeting a growth rate of 25-26 per cent for Fixed Deposits (FDs) in the country in the 2012-13 fiscal year.

Krishna Kumar, managing director and group executive for national banking, “We want to achieve a growth of at least 25-26% in fixed deposits in FY13 compared with a growth of roughly 20% in FY12.”

India’s largest lender is increasing its rates for FDs and is aiming to increase its FDs by a forth within the financial year. The bank had announced in increase in FD rates on select maturities by up to 25-100 basis points.

For Schemes with a maturity period of 7-90 days, the bank is offering 8% interest against the previous rate of 7%. Interest rates on 91-179 days and 181-240 days of FDs have also been increased by 75 bps and 100 bps, respectively, to 8 per cent. The bank is offering a rate of interest of 8 per cent for 241-day to 1-year FDs.

The increase is in line with the bank’s plan to move its liability profile to the short end amid falling interest rates in the country. Experts say that the increased fixed deposit rates will benefit the bank by widening its customer base.

Meanwhile, SBI had also announced an increase of up to 1 percentage point on short-term retail deposits. The bank will pay a uniform rate of 8 per cent on retail deposits in various deposits from seven days to less than a year. The bank has increased 7-90 days by 100 basis points, 91-179 days by 75 bps, 181-240 days by 100 bps and 241 days to one year by 25 bps.