SBI to pay uniform 8.75% on fixed deposits of 1 to 5 year maturity
16 Sep 2014
State Bank of India (SBI), the country's largest lender, has revised interest rates on term deposits below Rs1 crore for select maturities, with effect from 18 September. The move would bring deposits between 1 and less than 5 years under a uniform interest rate.
SBI on Tuesday announced a downward revision in its peak interest rate on term deposits of one to three year maturity from 9 per cent to 8.75 per cent, even as it raised interest rates for deposits between 180 days and 210 days from 7 per cent to 7.25 per cent.
In a communication to the stock exchanges, SBI said that the retail term deposit rates for deposits below Rs1 crore will be revised with effect from 18 September.
While deposits from 7 days to 179 days would continue to earn the same interest rate of 7 per cent per annum, for deposits of 180 days to 210 days, the interest rate has been revised upwards from the existing 7 per cent to 7.25 per cent. The interest rate for deposits from 211 days to less than 1 year would remain unchanged at 7.5 per cent.
For deposits of 3 years to less than 5 years, the rate of interest will remain unchanged at 8.75 per cent and deposits of 5 years and above will continue to earn 8.5 per cent as earlier.
CNBC-TV18 quoted SBI chairman Arundhati Bhattacharya as saying that they have excess of liquidity at present and there is not enough demand to match it and the revision in rates is to adjust the bank's asset liability management.
SBI had last revised its term deposit rates in July when it cut bulk term deposit rates by 25 bps and retail term deposit rates by 50 bps for certain tenures.