The State Bank of India (SBI) has cut deposit rates on savings and fixed deposits. The interest rate on savings accounts with a balance of up to Rs 1 lakh is cut to 3.25% from 3.5%. The rate cut is effective from 1 November 2019. The fixed deposit rates are lowered by 0.10% in the case of a deposit period from 1 year up to 2 years. The FD rate cuts are effective from 10 October 2019. The deposit base of SBI is above Rs 28 lakh crore.
The interest rates on savings account deposits over Rs 1 lakh are linked to the external benchmark rate or the repo rate. For such savings accounts, the rate of interest is 3%.
The bank states that there is adequate liquidity in the system to cut interest rates on deposits. The latest FD rates are:
|Period of deposit||Rate of interest||Rate of interest for senior citizens|
|7 days to 45 days||4.5%||5%|
|46 days to 179 days||5.5%||6%|
|180 days to 210 days||5.8%||6.3%|
|211 days to less than one year||5.8%||6.3%|
|One year to less than two year||6.4%||6.9%|
|Two years to less than three years||6.25%||6.75%|
|Three years to less than five years||6.25%||6.75%|
|Five years and up to ten years||6.25%||6.75%|
SBI has also lowered the interest rates on bulk term deposits, i.e. Rs 2 crore and above, by 0.30% for a deposit period of one year to less than two years’ maturity.
In addition, SBI has slashed its lending rate to 8.05%. The rate has been reduced by 0.10% for all types of retail loans; it is reduced for the sixth time during the fiscal year making home loans cheaper for borrowers. The new rates are applicable with effect from 10 October 2019.
I am a Chartered Accountant by profession. I specialise in personal taxes and corporate income tax matters. I am an avid reader and track developments in financial markets, economy and other market developments.