State Bank of India FD: SBI fixed deposit holder? Bank reduces interest rates - Here is what you should know

State Bank of India FD: The country's largest lender State Bank of India (SBI) has news for its FD customers. Now, the fixed deposit holder is going to get up to 20-25 basis points lesser interest on their fixed deposits from now onwards. SBI also announced a reduction in its MCLR by 10 bps. Last month the bank had cut down the interest rate on the SBI Fixed Deposit (FD) on various categories from 0.1 per cent to 0.5 per cent.

Notably, the new rate of interest will come into effect from 10 September 2019. "In view of the falling interest rate scenario and surplus liquidity, SBI also realigns its interest rate on term deposits (TD) w.e.f. September 10. Bank slashes retail TD rates by 20-25 bps and bulk TD rates by 10-20 bps across tenors," SBI said.

According to SBI official website the SBI latest FD rates (below ₹2 crore) for general public effective 10 September is 4.50% for 7 days to 45 days, 5.50% for 46 days to 179 days, 5.80% for 180 days to 210 days, 5.80% for 211 days to less than 1 year respectively.

Senior citizens will continue to get an additional 50 basis points over the FD interest rates. SBI has slashed the interest rates on FD for senior citizens by 20-25 basis points. However, SBI has kept the rate unchanged on long-term FDs. Deposits maturing in 3 years to less than 5 years will fetch an interest rate of 6.25% and FDs maturing in five years to ten years will also continue to give 6.25% interest.

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The revised Interest rates on 'Domestic Bulk Term deposits (Rs.2 Crore and above) with effect from 10th September 2019 will be as follows:

However, banks have cited stickiness of deposit rates, higher rates on small savings schemes as one of the reasons behind their inability to pass on repo rates. The new arrangement will become effective from September 10 2019.