SBI cuts fixed deposit rates by up to 1 pc

"The new rates would be effective from September 7," State Bank of India, the country's largest bank said in a statement.

When asked about the reduction, SBI Managing Director and Chief Financial Officer Diwakar Gupta said, "The bank has taken decision to cut interest rates on term deposits as liquidity is comfortable."

The decision to cut fixed deposit rates would help the bank improve margins, he said.

For deposits between 241 days and one year, the downward revision is 1 per cent. The new rate would be 6.5 per cent as against 7.5 per cent.

Of the total 9 maturity periods for fixed deposits, 0.5 per cent downward rate revision is for six categories.

With the revision, the interest rate on 7-90 days fixed deposit would come down to 6.50 per cent, from 7 per cent.

Similarly, term deposit 91-179 days would be down by 0.5 per cent, at 6.50 per cent and 180 days fixed deposits would also attract 6.50 per cent interest rate.

Fixed deposit with maturity of 181-240 days would now provide interest rate of 6.50 per cent, down from 7.25 per cent.

For one year to less than 2 year maturity period fixed deposits, the new rate will be to 8.5 per cent as against 9 per cent, down by 0.5 per cent.

At the same time, interest rate for fixed deposits with maturity period between 2-3 years and 3-5 years has been slashed by 0.5 per cent to 8.5 per cent.

However, the bank has left interest rate unchanged at 8.5 per cent for term deposit of 5-10 years.