SBI will cut interest rates on fixed deposits and term deposits by 0.25%

• India’s largest private sector bank State Bank of India (SBI) is yet again reducing the interest rates on term deposits across all maturities.
  
• From now on, the marginal cost of funds based lending rate (MCLR) for a year will be 8.15% per annum.
  
• In view of the falling interest rate scenario and surplus liquidity, SBI also realigns its interest rate on term deposits (TD) w.e.f. September 10.
  
• Recently, the Reserve Bank of India reduced the repo rates by 110 bps.

India’s largest private sector bank State Bank of India (SBI) will reduce the interest rates on term deposits across all maturities, starting tomorrow i.e. 10 September 2019. The bank slashed the retail term deposit rates by 25 bps or 0.25%.

The bulk term deposit rates have slipped by 10-20 bps.

"In view of the falling interest rate scenario and surplus liquidity, SBI also realigns its interest rate on term deposits (TD) w.e.f. September 10,” the bank said.

However, while this might come as bad news for those who want to store their money in FDs, those keen on taking loans have some good news in store.

The bank also announced a reduction in marginal cost of funds based lending rate (MCLR) by 10 bps. Given that, the MCLR for a year will be 8.15% per annum — which is currently at 8.25%. This is the fifth year that the bank has cut MCLR.

Recently, the Reserve Bank of India (RBi) reduced the repo rates by 110 bps, and asked the banks to trim the interest rates in favour of the customers. Under this, the borrowers will directly benefit from the RBI rate cuts.