| New Delhi: SBI juggled with its deposit rates on Wednesday and while it announced a 0.25% interest rate reduction for deposits of most maturities, it increased the deposit rate by 0.25 percent for deposits with a maturity period of 1 year to 549 days. Deposits with for 2-3 year maturity period retained the previous interest rates and similarly interest rates on deposits with a maturity period fo 3-10 years were also not touched. The table below summarizes the change in deposit rates by SBI: | Duration | Previous Rate | Revised Rate | | 15-45 days | 5% | 4.75% | | 46-270 days | 5.50% | 5.25% | | 271days -1 year | 6.75% | 6.50% | | 1 year -549 days | 8.00% | 8.25% | | 2-3 years | 8.25% | 8.25% | | 3-10 years | 8.50% | 8.50% |
Deposit rates for senior citizens also witnessed a change. The interest rate on deposits with maturity period of 1 year to 549 days was increased by 0.25 percent, while the rates on a deposit of 550 days tenure were slashed by 0.25 percent. Revised SBI deposit rates for senior citizens: | Duration | Previous Rate | Revised Rate | | 1 year -549 days | 8.50% | 8.75% | | 550 days | 9.25% | 9% |
State Bank announced yesterday that its deposits have been performing well and have shown a growth of 25% to 26% as compared to the same period last year. This reduction in interest rates is a possible step towards reduction in the cost of funds. Retail depositors will suffer by this step of SBI as their incomes will be affected, but the resulting low cost of funds could translate into benefits for the borrowers. |
