Fixed deposits in SBI to get lower interest

05 September, 2012

India's largest bank, the State bank of India, has lowered interest rates on fixed deposits (FD) by 0.5% - 1%. There are strong chances that other PSU banks may also follow the footsteps of SBI and reduce their FD interest rates.

THERE ARE, in total, nine maturity periods for the fixed deposits. Out of the nine categories, six will have to face a reduction of 0.5% and the rest will see a reduction of 1% in interest rates. The new interest rates will be effective from September 7th, the bank said in a statement.

The interest rates has been reduced on the fixed deposits for less than five years. However, the interest rates will remain intact on FDs for five to ten years.

For a deposit upto 15 lakhs from seven days to 90 days and from 91 days to 179 days the existing rate of interest 7% has been revised to 6.50%. For the period of 91 days to 179 days the rate of interess has been cut down to 6.5 % from 7%.

However, for deposits between 241 days to less than one year the reduction is 1%. For this category the new interest rate will be now 6.5% instead of earlier 7.5%.

Interest rates have also been slashed for the deposit of more than 15 lakhs in the same manner.

Banking customers have expressed displeasure over the move of SBI. Rishikesh Kumar, who lives in Delhi, said that the SBI's step will add to the woes of customers already suffering from inflationary pressure that is making their savings lesser.