SBI cuts fixed deposit rate by 25 bps; Here's what you need to know
A day after slashing MCLR, the State Bank of India (SBI) also reduced its fixed deposits rate by 25 basis points for less than Rs 1 crore on various tenure with effects from Wednesday.
According to SBI's website, fixed deposits interest rate for one-year tenure will now stand at 6.25% from prevous 6.50% for public. For senior citizen, the interest rate on one-year tenure is at 6.75% from previous 7%.
From 2 years to 10 years tenure, the fixed deposit rate is kept at 6% for public and 6.50% for senior citizen in comparison with earlier 6.25% and 6.75% respectively.
SBI said, “The proposed rates of interest shall be made applicable to fresh deposits and renewals of maturing deposits.”
Further it added, that interest rate payable to SBI staff and SBI pensioners will b 1% above the applicable rate mentioned above.
The rate applicable to all Senior Citizens and SBI Pensioners of age 60 years and above will be 0.50% above the rate payable for all tenors to resident Indian senior citizens i.e. SBI resident Indian Senior Citizen Pensioners will get both the benefits of Staff (1%) and resident Indian Senior Citizens (0.50%).
Post demonetisation announcement, the banks have been passing on the benefits to customers by slashing the interest rates.
Between July 2017 – till date, SBI has trim down fixed deposits interest rate by 50 basis points – taking it to over 7 year low. FDs are the most favorable investment for Indians. Parking money in FDs make sense if you do not want to take risk or you are a "conservative" investor.
On October 31, SBI brought down its Marginal cost of funds based lending rate (MCLR) by 5 basis points on various tenure with effect from November 01, 2017.
Under SBI, benchmark lending rate has been now reduced to 7.95% for one-year tenure from previous 8%. Similarly, for two-years and three-years tenure now MCLR stands at 8.05% and 8.10% respectively.
SBI which accounts more than a fifth of India's banking assets, lowered its lending rate for the first time in 10 months.
The share price of SBI closed at Rs 319.80 per piece on Wednesday, higer by Rs 14 or 4.58% on BSE.