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.
Also Read: Repo Rate Slashed Fifth Time in a Row; Now at 5.15 per cent
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.
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