State Bank of India (SBI) has cut interest rates on fixed deposits (FDs) by up to 40 basis points (bps) across all tenors. The new rates on retail term deposits are applicable from May 27, according to data available on the bank's website. The investors will now earn 5.1 per cent interest on 1 year to less than 2 year deposits. Similarly, deposits of 3 years to less than 5 years will get 5.3 per cent and 5 years and up to 10 years will earn 5.4 per cent interest. The SBI had earlier slashed rates on May 12. The SBI had lowered rates by 20 bps applicable for FDs of up to three years effective May 12.
The senior citizens will get 5.6 per cent interest on 1 year to less than 2 year deposits. Also, 5.8 per cent will be available on the deposits of 3 years to less than 5 years. The investors will get 6.2 per cent interest on deposits of 5 years and up to 10 years.The country's largest public sector lender also cut rates on bulk deposits of Rs 2 crore or more by up to 50 bps. The revised rates under this category are also applicable from Wednesday.
On May 22, Reserve Bank of India (RBI) lowered its repo rate by 40 bps to 4 per cent. The reverse repo rate was also reduced by 40 bps to 3.35 per cent.
"The RBI policy announcement in response to the fallout of COVID pandemic is timely. The reduction in policy rate by 40 bps under the assumption that growth in FY21 will be negative is an appropriate move to support economic activity. Uncertainty associated with pandemic, normalisation of economic activity and relaxation made in social distance makes it imperative that policy response is calibrated and swift," Rajnish Kumar, Chairman, SBI, had then said.