The State Bank of India (SBI) recently announced a drop in interest rates for its special fixed deposit plans that last 444 days. This change comes just five days after the central bank cut interest rates to help the economy. Now, SBI is offering 7.05% on these 444-day deposits, down from the previous rate of 7.25%.
These special deposits were introduced in July 2024 to attract customers for a limited time. For regular fixed deposits, SBI’s highest rate is 6.90%. Starting Tuesday, April 15, seniors can earn more: 7.55% for seniors and 7.65% for super seniors over 80 years old.
Earlier, in April 2023, SBI had launched a different special deposit plan for 400 days at 7.10%. Banks, including SBI, started these special plans to attract more deposits as there was a slowdown in deposit growth.
Additionally, SBI has lowered interest rates on loans linked to external benchmarks by 0.25%, starting April 15. However, they haven’t changed their main lending rates, which stay between 8.20% and 9.10%.
The bank’s External Benchmark Lending Rate (EBLR) will drop from 8.90% to 8.65%, and the repo-linked lending rate will decrease from 8.50% to 8.25%.
Experts say this move shows that banks, especially state-owned ones, are still trying hard to attract customer deposits. Other banks are likely to follow SBI’s lead on reducing rates as well. For example, Indian Bank has already extended its special deposit scheme until the end of June.
SBI has also made some small changes to rates on deposits below ₹3 crore, reducing them by 0.10%. Fixed deposits that mature in one to less than two years will now earn 6.70%, down from 6.80%. Deposits maturing in two to less than three years have gone down to 6.90%.
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