The rate cut on fixed deposits is the second in a month.
The country's largest bank, the State Bank of India (SBI), has once again cut interest rates on fixed deposits. SBI has reduced interest rates on FDs for the second time in less than a month. Interest rates on FD have been cut by up to 0.5%. These new rates will be applicable from 26 August. Earlier on August 1, SBI cut FD interest rates.
SBI will now pay only 4.5 percent interest on deposits of 7 to 45 days instead of 5 percent. At the same time, instead of 5.75 percent on deposits of 46 to 179 days, now interest will be 5.5 percent. For deposits of 180 to 210 days, you will get 6 percent interest instead of 6.25 percent. At the same time, interest will be 6.7 percent instead of 6.8 percent on deposits of 1 year to 2 years.
The bank will continue to pay 3.5% interest on the savings account of customers with deposits up to Rs 1 lakh. For customers with more than 1 lakh deposits, this rate is only 3%. However, SBI has cut the fixed deposit retail rate from 0.1% to 0.5%. Large deposits have been cut from 0.3% to 0.7%.
SBI has linked the repo rate to the interest rate on deposits. The bank said in a statement that in view of the excess cash, the bank has decided to reduce its deposit rate. The reduced rates on deposits will be applicable from 26 August 2019.