SBI has also cut interest rate on income tax-saving fixed deposits
The sharp cut in interest rate on SBI FD rates comes amid a fall in interest rate in the financial system
The country's largest lender State Bank of India (SBI) has revised its fixed deposit (FD) rates across all tenors. The bank has sharply cut interest rate on fixed deposits ranging from 45 days to ten years. On FDs maturing in seven days to 45 days, SBI has reduced the rate of interest from 5.75% to 5. 00%. On deposits maturing in 46 days to 179 days, the bank has reduced the interest rate to 5.75%. Earlier it was offering an interest rate of 6.25%. For deposits maturing in 180 days to 210 days, SBI has cut the interest rate by 10 basis points. Now the bank will offer an interest rate of 6.25%.
For short-term deposits ranging from 211 days to less than one year, SBI has slashed the interest rate from 6.40% to 6.25%. These revised rates will be applicable on term deposits across all tenors with effective 1 August 2019, SBI mentioned on its website.
On mid-term deposits ranging from one year to less than two years, State Bank of India has reduced the interest rates by 20 basis points. Now these deposits will fetch you an interest rate of 6.80%.
Latest SBI FD rates
SBI 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 FD will fetch you an interest rate of 6.70%.
For FDs maturing in three years to less than five years, SBI will offer an interest rate of 6.60%, earlier these FDs were fetching an interest rate of 6.70%. For deposits maturing in five years to ten years, SBI has reduced the interest rate from 6.60% to 6.50%
SBI had earlier tweaked interest rate on some select maturities effective from 9 May 2019.
Watch: SBI slashes fixed deposit rates, other banks may follow
Many banks have been reducing the interest rates on fixed deposits due to a fall in interest rate in the financial system and surplus liquidity. HDFC Bank, Axis Bank, PNB, BoB, and Kotak Mahindra, among others, had revised their fixed deposit rates rates this month.
SBI's cut comes days before the RBI is set to decide on its monetary policy. The central bank is widely expected to lower interest rates in next month's policy meeting. The RBI so far this year cut the repo rate by a combined 75 basis points, leading to a sharp fall in bond yields.
The government had earlier cut interest rates on small savings instruments including PPF for the July-September quarter.