News About State Bank of India Fixed Deposit

• State Bank of India reduces term deposit rates by up to 0.50%

  The nation's largest lender State Bank of India (SBI) has decided to reduce the interest rates on Fixed Deposits (FDs) by 0.50%. The new interest rates are applicable for medium and long-term FDs that is below Rs.1 Crore. SBI was offering 6.75% of interest on 2-3 years of deposits, however, now the interest an individual can earn will be limited to 6.25%. The new rates are also revised for Senior Citizens. For the deposits that are made for more than three years, SBI will offer an interest rate of 6.50%. The new rules are effective from 29th of April.

  

  10th May 2017

• State Bank of India slashes FD rates to 7.05%, 6 year low

  In a huge setback for customers, State Bank of India has reduced the interest rate on its one-year Fixed Deposits to a six year low of 7.05%. This was done after the most recent round of cuts put forth by the largest bank in India and saw rates on two-year and three-year deposits being increased to 7% and 6.5%, respectively. The last time such as incident occurred was between October 1 and December 7 in the year 2010 when the rate of interest was down to 7%.

  SBI’s peer in Delhi, the Punjab National Bank has reduced the rate of interest on one-year deposits by 5bps or basis points to 7.2% and those on 2-year and 3-year deposits by 10bps or base points each to 7.05%. Bank of Baroda has maintained the rate of interest on Fixed Deposits of one and two years, but has decreased the interest rate on 3-year deposits by 5 base points to 7.25%. Important lenders from the private sector such as HDFC Bank, Axis Bank and ICICI Bank have held rates on their one-year, two years and three years deposit at 7.25%.

  Reducing the rates on fixed deposits are necessary for banks to maintain their margins while transmitting the Reserve Bank of India’s rate cuts, which has amounted to 175 base points since the January of 2015 to borrowers. Borrowers are likely to get better deals but fixed deposits are also becoming increasingly unappealing for savers.

  

  7th November 2016

• SBI to Benefit from Lower Bulk Deposit Rates As Government Looks To Park less Surplus with RBI

  Deposits of over Rs 1 Crore have seen interest rates rise over the previous two months on the back of tightening liquidity conditions within the system. This rise has impacted the ability of lenders to reduce rates even though the Reserve Bank of India has hinted at this effect taking place as an outcome of its policy decisions.

  The biggest lender in the country, The State Bank of India, have raised their bulk deposit rates over the previous two months. They have coupled this with a raise in interest rates on term deposits of over Rs 1 crore by 25-125 basis points from mid-January.

  

  14th March 2016

• SBI to ask for separate interest rates on small savings.

  The State Bank of India, one of the leading public sector banks in India request the Centre to set differential interest rates on small savings schemes as per age groups. This is almost similar what banks offer to senior citizens. Banks in India offer 25-50% basis point higher interest rates on senior citizen deposits. As per the study conducted by SBI, a person belonging to the age group of 30-45 mainly saves for the purpose of tax saving whereas individuals above the age of 45 years save for social security related reasons.

  

  7th January 2016

• State Bank of India decides to reduce rate of interest for deposit of all tenures

  After the repo rate cut by the Reserve Bank of India being higher than expected, banks like State Bank of India decides to reduce rate of interest for deposit of all tenures by 0.25% The lending rate of banks was to reduce after the policy came into play, but with the repo rate cut being higher the banks will need to make up by lowering their deposit rate to maintain a balance between the lending and borrowing.

  

  5th October 2015

• SBI cuts deposit rates on select maturities

  New Delhi: The State Bank of India slashed deposits rates on certain maturities by 25 to 50 basis points on Tuesday. The rate cuts will be effective from August 19. A 25 basis points cut will be applicable for deposits with tenors of 180 days and up to three years, while 50 basis points will be applicable for deposits above three years. The revised interest rates for retail domestic term deposits below Rs. 1 crore will be 7% for tenor of 180 days to 210 days as against 7.25% earlier. The revised rates for deposits below Rs. 1 crore for tenors ranging from 1 year to 455 days, 2 years to less than 3 years and 3 years to less than 5 years will be 7.5% (7.75% earlier), 7.75% (previously 8%) and 7.25% (7.75%) respectively. For tenor ranging from 5 years and up to 10 years, the revised rate will be 7.25% from 7.75% earlier.

  The revised rate applicable to senior citizens and SBI pensioners aged 60 years and above will be 0.25% above the rate payable for all tenors to resident senior citizens in India.

  Oriental Bank of Commerce announced a rate cut from 10% p.a to 9.90% (10 basis points) on Friday.

  

  19th August 2015

• SBI Slashes FD Interest Rates on 1-3 Year Tenures

  In August of this year, India’s premier public sector bank, State Bank of India (SBI) had slashed its prevalent interest rates on fixed deposits for tenures exceeding five years from 8.75% to 8.50%, a full drop of 0.25 basis points. Continuing this trend, the bank has now extended a similar cut to fixed deposits with tenures ranging from 1-3 years that host fixed deposits of less than Rs.1 crore. Starting December 8, the interest rates for such maturities will lower by 0.25%, a fall from the current rate of 8.75% to 8.50%, specifically applicable for NRE deposits that have tenures of one year and above. According to experts, this move is aimed at curbing the problem of high liquid funds available with SBI, and the lack of demand for credit that correspondingly requires an adjustment of the Asset Liability Management (ALM).

  

  9th December 2014

• SBI Cuts Interest Rates on Short Term Deposits, Again

  India’s largest public sector bank, the State Bank of India (SBI) has slashed interest rates on select short term maturities, yet again. This strategic move, to be effective from November 1st 201, is the third time in the last three months that SBI has taken the axe to it’s promising short term maturities portfolio (up to Rs.1 crore maturing in 7-45 days). The lender has dropped a whole percentage point, going from the prevalent 6% to 5%, a move that will not be enthusiastically received by depositors in the higher investment bracket.

  SBI Chairman Arundhati Bhattacharya lists the bank’s excess of liquid funds and lack of demand for credit that requires an adjustment of the Asset Liability Management (ALM), as the express reason for this flash move. Experts at the India Ratings and Research Pvt Ltd believe that these gradual changes in the deposit rates will allow SBI to improve it’s Net Income Level (NIL) over the forthcoming period of time. Earlier, the premier lender had reduced the interest rate on deposits in the 7-45 days margin by 100 basis points to 6% as on 30th September. Before that, on 16th September, the bank had slashed interest rates on medium term deposits with tenures of a year to less than three years by 25 basis points to arrive at 8.75% and a further 25% basis points on deposits in the 180-210 days bracket to a value of 7.25%. All in all, it’s a period of aggressive shake-ups at SBI.

  

  29th October 2014

• SBI’s Second Rate Revision on Short-Term Deposits

  SBI announced 1% rate reduction on it's FD schemes of tenors up to 45 days. The returns now stand at 6% p.a. from 7% p.a., effective October 7th, 2014. This is the second time within a span of one month that SBI has revised interest rates following 0.25% reduction in the month of September on it's medium-term deposits.

  Stiff competition in the retail loan segment and the start of the festival season prompted many banks to offer discounts on their lending rates. In order to sustain profitability banks will have to maintain a healthy balance between deposit and credit growth. While SBI’s deposit growth remains satisfactory, credit growth has not kept pace. This is a situation most banks appear to be facing given the slow uptake in corporate credit demand.

  

  6th October 2014