The largest Public Sector Bank, State Bank of India slashed the fixed deposit (FD) account interest rates and announced some benefits to the senior citizens.
The move comes after RBI on Friday announced a massive interest rate cut to the tune of 75 basis points, which brings the repo rate down to 4.4%.
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“Responding to the RBI’s extraordinary monetary policy measures to support the wider economy, the bank passes on the entire 75 basis points (bps) repo rate cut to its borrowers availing loans linked to external benchmark-linked lending rate (EBR) as well as a repo-linked lending rate (RLLR),” SBI said in a statement.
The following are the new rates that have been introduced with effect from March 28.
- 7 days to 45 days – 3.5%
- 46 days to 179 days – 4.5%
- 180 days to 210 days– 5%
- 211 days to less than 1 year – 5%
- 1 year to less than 2 year– 5.7%
- 2 years to less than 3 years – 5.7%
- 3 years to less than 5 years – 5.7%
- 5 years and up to 10 years – 5.7%
The senior citizens will benefit as SBI offers an additional 50 basis point interest rate which is not applicable for the general public.
Senior citizens will now be eligible to get 4% to 6% on FDs which will mature in 7 days to 10 years.
This move has been addressed amidst concerns of a lack of monetary policy transmission. This means that the customers aren’t getting the benefits of the RBI rate cut.
In 2019, the RBI cut over 120 basis points but the banks only passed a little over 50 basis points to the customer.