Consumers planning to deposit their money for medium and long term span in State Bank of India might have to reconsider their plans. The state-owned bank has slashed its term deposit rates by up to 50 basis points. The rates have been reduced for medium and long term deposits and for deposits amounting below Rs 1 crore.
According to the revision, for two to less than three years deposits, SBI will provide a rate of 6.25 per cent as compared to 6.75 per cent earlier. For the similar time-span, the deposit rates for senior citizens have been cut to 6.75 per cent from 7.25 per cent. For deposits maturing between three years and 10 years, the rates have been lowered by 25 basis points to 6.50 per cent.
The lender will be offering the new rates for fresh deposits and renewals applicable from 29 April. The short term deposits, that is, for deposits pertaining to maturity between seven days to less than two years, the rates are unchanged. The bank is offering highest rates of 6.90 per cent for one year to 455 days term deposits.
Even after this cut, SBI’s rates for medium and long-term deposits are 25-50 bps higher than those offered by its private competitor HDFC Bank. However, making the ride difficult for the public sector enterprise, ICICI Bank offers 25-50 bps more than SBI on term deposits between two and 10 years.
With one of the oldest banks in India reducing its return rate, the game squares open for an average consumer who deposits amounts lesser than Rs 1 crore.