For the second time in less than a month, the State Bank of India (SBI) has cut interest rates on fixed deposits (FD) for certain tenors. Interest rates on short-term FDs with tenure of up to 45 days has been reduced sharply by 50 basis points or 0.50 per cent. (100 basis point = 1 per cent). The new rates are effective from March 10, 2020.
According to the newly effective interest rate, FD having tenor of 7 to 45 days will earn 4 per cent instead of 4.5 per cent earlier.
FD rates for tenure of one-year and above have been reduced by 10 bps. The one year FD will now earn 5.9 per cent instead of 6 per cent earlier.
This is the second time bank has reduced rates in one month. In February the PSU bank reduced FD rates by 10-50 bps. The back-to-back rate cuts have come despite RBI maintaining status quo in its monetary policy announcement in the month of February.
In should be noted that FD rates applicable for tenure of 46 days to 179 days, 180 days to 210 days and 211 days to less than one year have been kept unchanged.
The PSU bank has als0 reduced the MCLR rates by up to 15 bps.
