SBI cuts rates on bulk fixed deposits

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State Bank of India (SBI) customers has good news. It was announced on Monday that they will give reduction in interest rate on fixed deposits of maturity up to one year by 0.25 per cent to 7.25 per cent.

SBI in one of its statements said that, “It has been decided to revise downwards by 25 basis points the interest rate on bulk deposits above Rs 1 crore for the tenors 7 days to less than 1 year”.

As a result of which the interest rate for bulk deposits for the above tenors will be 7.25 per cent per annum which will be effective from the 7th of June, 2013.

This announcement is made one month right after RBI decided to reduce key policy rate by 0.25 per cent.

RBI reduced their short-term lending (repo) rate to 7.25 per cent from 7.50 per cent, lowest ever since May 2011, while holding on to the CRR for banks i.e. at 4 per cent.

One more public sector lender, Oriental Bank of Commerce (OBC) seemed to lower their fixed deposits rates up to 1 per cent on selected maturities in the month of May.

For fixed deposit rate for maturities on 31-45 days, it has been reduced to 6 per cent, the former being 7 per cent.

Also the term deposit of 180-269 days makes 0.5 per cent lower interest rate at 8 per cent as compared to previous rate of 8.50 per cent. Interest rate on 91-179 days is also lowered by 0.25 per cent at 7.75 per cent.