Country's largest lender State Bank of India slashed interest rates on fixed deposits across various tenure by up to 0.5 percentage point, a move which will lower returns for savers.
In view of the falling interest rate scenario and surplus liquidity, SBI realigns its interest rate on Term Deposits with effect from August 26, 2019, SBI said in a statement.
The move to reduce interest rate on fixed deposits by the country's largest lender is expected to be followed by other lenders.
The bank has slashed retail term deposit rates by 10-50 basis points across tenors as well as bulk term deposit rates by 30-70 basis points across tenors, it said. The bank has slashed the interest rate for the fixed deposits with maturity of 7-45 days to 4.5 per cent from existing 5 per cent.
The rate reduction 46-179 days, 180 days to less than one year maturities baskets is 25 basis points (0.25 percentage point) at 5.5 per cent and 6 per cent respectively while for maturity bucket of 1-2 years is only 10 basis points at 6.70 per cent.
For top maturity period of 5-10 years, the decrease is again 25 basis points at 6.25 per cent.
The bank also said that it has retained interest rate on savings bank deposit at 3 per cent for customers with balances above Rs 1 lakh with a view to protecting the interest of savings bank depositors.
(with news agency inputs)