To come into effect from tomorrow.

Our Bureau

Mumbai, May 2 State Bank of India has decided to pare interest rates on fixed deposits by 25 basis points across the board with effect from May 4, 2009. Post the interest rate revision, a fresh one-year fixed deposit (FD) with the bank will fetch 6.75 per cent and a 1,000-day deposit will earn 8 per cent interest.

The new interest rate on the ultra short-term FD (15 days to 45 days maturity) and the ultra long-term FD (8 years and up to 10 years) would be 3.75 per cent (4 per cent now) and 8.25 per cent (8.50 per cent) respectively, according to a bank statement.

A fresh deposit in the 46 days to 90 days maturity bucket will earn 4.75 per cent interest; 91 days to 180 days: 6 per cent; 181 days to less than a year: 6.75 per cent; 1 year to less than 2 years: 7.50 per cent; 2 years to less than 1,000 days: 7.75 per cent.

While the bank is offering 8 per cent interest on a 1,000-day FD, the interest rate on FDs beyond 1,000 days and up to 5 years will be 7.75 per cent.

Following the downward revision in interest rates on the liabilities side, the bank is expected to take a similar action on the assets side by cutting its benchmark prime lending rate, which currently stands at 12.25 per cent.

Earlier this week, IDBI Bank had announced its decision to cut interest rates on fixed deposits in seven maturity buckets by 25 basis points even as it upped the interest rate on the long-term deposit (over 5 years to 10 years duration) by 50 basis points. The bank said that the revised deposit rates will be effective from May 4, 2009.

SBT pares rates

Our Thiruvananthapuram Bureau reports: State Bank of Travancore has revised the interest rates for FCNR and NRE term deposits with effect from May 3, 2009.

As per the revision, the interest rate for NRE deposits will be 3.64 per cent a year for a period of one year to less than two years; 3.24 per cent for two years to less than three years; and 3.64 per cent for three years and above to five years, according to a release from SBT.

The new interest rate for FCNR deposits in dollars will be 2.89 per cent for a period of one year to less than two years; 2.49 per cent for two years to less than three years.

For three years to less than four years, the interest rate is 2.89 per cent; 3.23 per cent for four years to less than five years; and 3.49 per cent for five years.

For deposits in pound sterling, the rates for corresponding periods will be 2.92 per cent, 3.12 per cent, 3.59 per cent, 3.89 per cent and 4.12 per cent, respectively, while the rates for deposits in euro for similar periods will be 2.73 per cent, 2.83 per cent, 3.20 per cent, 3.47 per cent and 3.72 per cent, respectively.

(This article was published in the Business Line print edition dated May 3, 2009)
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