SBI cuts fixed deposit rate on select maturities by 0.5%

New rate will be effective from July 18

State Bank of India today slashed the interest rate on short-term fixed deposits up to 179 days by 0.5%, a move expected to be followed by other lenders.

Interest rate on fixed deposits between 7-179 days has been reduced to 7% from 7.5%, SBI said in a statement.

The new rate would be effective from July 18, it said.

In case of bulk deposits above Rs 1 crore, the downward revision has been effected in two maturity buckets.

The interest rate on term deposits between 7-60 days has been reduced by 0.25% to 6.25% while for 61 days to less than one year, it has been reduced to 6.75% from the existing 7%.

Last month, the central bank had left key policy rate unchanged in its bid to rein in inflation.

The repo rate, at which the Reserve Bank of India lends to banks was retained at 8%. The cash reserve ratio for banks was kept unchanged at 4%.

SBI last reduced its fixed deposit rates in February by up to 0.5% on select maturities.

While deposit rates for maturities of three to five years was lowered by 0.25%, those for five years and above were cut by 0.50%.