The Hindu Business Line : SBI cuts rates on short-term deposits

EVEN as the inflation rate inched up to 7.51 per cent, the country's biggest bank, State Bank of India has trimmed interest rates on its short-term domestic term deposits by 25 basis points, effective August 9.

Although the bank has not given a reason for its cutting deposit rates, analysts are of the view that perhaps SBI has seen a significant increase in its short-term deposits and wants to discourage any additional inflows.

Interest rates on short-term deposits with maturity between 15-45 days and 46-179 days have been pruned by 25 basis points to 3.75 per cent per annum and 4.25 per cent per annum respectively, said a press release. The bank has also decided to discontinue the domestic term deposits with a maturity period of 7 days to 14 days for Rs 15 lakh and above.

There is no change in interest rates of term deposits with maturity period of 180 days and above.

For term deposits of 180 days to less than one year, and one year to less than three years and three years and above, the interest rates shall continue to remain at 4.75 per cent per annum, 5 per cent per annum and 5.25 per cent per annum, respectively.

Senior citizens will continue to receive higher interest rates of 50 basis points for domestic term deposits with maturity of one year and above.

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