<p>The senior citizen's primary source of income – fixed deposits with banks – is set to earn lesser interest than before, with the country's largest public sector lender the State Bank of India announcing a rate cut on such deposits from Monday.</p>.<p>This is the second such cut in fixed deposits in the past five months since October 2019. Other lenders are expected to follow the move, too.</p>.<p>“In view of surplus liquidity in the system, SBI realigns its interest rate on retail term deposits (less than Rs 2 Crore) and bulk term deposits (Rs 2 Crore & above) w.e.f. February 10, 2020. The bank slashed Term Deposits rates by 10-50 bps in the retail segment and 25-50 bps in the bulk segment,” SBI said.</p>.<p>SBI offers senior citizens’ an additional 50 basis point interest rate on fixed deposits across all tenures.</p>.<p>For the fixed deposits maturing in 7 days to 45 days, the lender will give 5% as before but, for those maturing in 46 days to 179 days, will fetch 5.50% in place of 6% earlier.</p>.<p>For fixed deposits maturing in 180 days to 210 days and 211 days to less than 1 year, the bank will give an interest rate of 6% against 6.3% earlier.</p>.<p>After the latest revision, SBI will give 6.50% interest to senior citizens for maturity between one year and 10 years. The interest rate was 6.6% earlier.</p>.<p>The bank also cut the marginal cost-based lending rates by 5 basis points across all tenors intending to cut housing and auto loans, which are MCLR-based but the impact of a reduction will be felt once only at the time of reset date of loans of a consumer, which is usually six months or one year.</p>.<p>The reduction in MCLR comes a day after the Reserve Bank of India announced certain measures to bring down the cost of retail loans. The central bank used a series of unconventional tools to improve transmission after the banks appeared to be reluctant to align their lending rates in response to the rate cuts. The effective transmission of rates was 55bps against 135bps of rate cuts in the calendar year 2019.</p>
<p>The senior citizen's primary source of income – fixed deposits with banks – is set to earn lesser interest than before, with the country's largest public sector lender the State Bank of India announcing a rate cut on such deposits from Monday.</p>.<p>This is the second such cut in fixed deposits in the past five months since October 2019. Other lenders are expected to follow the move, too.</p>.<p>“In view of surplus liquidity in the system, SBI realigns its interest rate on retail term deposits (less than Rs 2 Crore) and bulk term deposits (Rs 2 Crore & above) w.e.f. February 10, 2020. The bank slashed Term Deposits rates by 10-50 bps in the retail segment and 25-50 bps in the bulk segment,” SBI said.</p>.<p>SBI offers senior citizens’ an additional 50 basis point interest rate on fixed deposits across all tenures.</p>.<p>For the fixed deposits maturing in 7 days to 45 days, the lender will give 5% as before but, for those maturing in 46 days to 179 days, will fetch 5.50% in place of 6% earlier.</p>.<p>For fixed deposits maturing in 180 days to 210 days and 211 days to less than 1 year, the bank will give an interest rate of 6% against 6.3% earlier.</p>.<p>After the latest revision, SBI will give 6.50% interest to senior citizens for maturity between one year and 10 years. The interest rate was 6.6% earlier.</p>.<p>The bank also cut the marginal cost-based lending rates by 5 basis points across all tenors intending to cut housing and auto loans, which are MCLR-based but the impact of a reduction will be felt once only at the time of reset date of loans of a consumer, which is usually six months or one year.</p>.<p>The reduction in MCLR comes a day after the Reserve Bank of India announced certain measures to bring down the cost of retail loans. The central bank used a series of unconventional tools to improve transmission after the banks appeared to be reluctant to align their lending rates in response to the rate cuts. The effective transmission of rates was 55bps against 135bps of rate cuts in the calendar year 2019.</p>
