The State Bank of India has lowered its interest rates on fixed deposits across all tenors. The new rates will come into effect from August 1, 2019, just a few days ahead of the monetary policy meet of the Reserve Bank of India.
For retail domestic term deposits maturing in 7-45 days, the bank has sharply reduced the rates to 5 per cent from 5.75 per cent.
On deposits maturing in 46 days to 179 days, the bank has reduced the interest rate to 5.75 per cent. Earlier it was offering an interest rate of 6.25 per cent.
For deposits maturing in 180 days to 210 days, the SBI has cut the interest rate by 10 basis points. The bank will now offer an interest rate of 6.25 per cent.
For short-term deposits ranging from 211 days to less than one year, the SBI has slashed the interest rate from to 6.25 per cent from 6.40 per cent.
On term deposits ranging from one year to less than two years, the bank has reduced the interest rates 20 basis points. Now these deposits will fetch an interest rate of 6.80 per cent.
Long-term deposits
The bank has also slashed the interest rates on its long-term deposits. For deposits maturing in two years to less than three years, the bank has slashed the interest rate by 5 basis points. Now these fixed deposits will fetch an interest rate of 6.70 per cent.
For fixed deposits maturing in three years to less than five years, the SBI will offer an interest rate of 6.60 per cent against 6.70 per cent earlier.
For deposits maturing in five years to 10 years, the bank has reduced the interest rate to 6.50 per cent from 6.60 per cent. Domestic bulk deposits have also seen a reduction in interest rate of up to 35 basis points.
The SBI said the revision in the rates shall be applicable for fresh deposits and renewal of maturing deposits.
Moreover, tax saving retail deposits and NRO deposits shall be aligned to the revised rates, the bank said.
The bank said the revision is in view of a falling interest rate scenario and surplus liquidity. The RBI has so far this year lowered the repo rate by a combined 75 basis points. With a decline in bond yields, the government has also decided to lower the small savings rate, including that of PPF for the July-September quarter.
Many banks such as PNB, Bank of Baroda and private sector banks have been reducing the interest rates on fixed deposits because of a fall in interest rates and surplus liquidity.
RBI governor Shaktikanta Das in a meeting with the CEOs of the public sector banks earlier this month had discussed the issue of the transmission of monetary policy rates.
