New Delhi: State Bank of India, the country’s largest public sector bank, on Friday announced a cut in interest rate of up to 0.5 percent on all term deposits of various tenures. This move of the bank will give low returns to those investing for savings.
SBI has said in its statement that in the environment of declining interest rates and excessive liquidity, the bank has decided to cut its interest rates on fixed deposits from August 26, 2019. With the country’s largest bank reducing the interest rate on FD, it is expected that all other banks will soon follow it.
The bank has cut 10 to 50 basis points on all term retail term deposits and 30 to 70 basis points on bulk term deposits. The bank has lowered the interest rate on FDs with 7 to 45 days’ interest to 4.5 percent from the current 5 percent.
Similarly, the rate of interest on FDs of 46 to 179 days has been reduced by 0.25 percent to 5.5 percent. The new rate of interest on FDs with an interest of less than 180 days to a year will be 6 percent, which is currently 6.25 percent. The interest rate on FDs with a maturity of one to two years has been reduced by 0.10 percent to 6.70 percent.
The rate of interest on 5 to 10 year FDs has been reduced by 0.25 percent to 6.25 percent. The bank has not made any change in the rate of interest on savings accounts. To protect the interests of savings account holders, the bank has retained a 3.5 percent interest rate on savings accounts with balances of more than Rs 1 lakh. From May 1, 2019, SBI has linked the interest rate of savings bank deposits with the repo rate.