SBI cuts deposit rates, extends home loan

SBI cuts deposit rates, extends home loan

Long-term deposit rates of 3 to10 years remain unchanged

Accordingly, it has lowered deposit rates by 25-50 basis points on amounts less than Rs.1 crore with effect from Monday, November 9, 2009.

The new interest rate for a deposit of 15-45 days would be 2.5 per cent, which is down from the current 2.75 per cent, while the rates for 181 days to less than a year deposits have been cut by 50 basis points to 5.25 per cent.

With this latest revision, SBI has effected the seventh deposit rate cut  during the current financial year.  However, the bank has left the long-term deposit rates of three years to 10 years unchanged.  It may be noted that SBI, India’s largest bank, controls about a quarter of the country’s loans and deposits.

Loan rate

State Bank of India has extended its special home loan scheme at 8 per cent interest rate by over four months to March 31, 2010, a move which would provide relief to small home loan borrowers.

The bank, which offers the special scheme under ‘My Home Campaign’, offers 8 per cent fixed interest rate for 5 years for loans up to Rs 5 lakh, with a maximum tenure of 10 years. The scheme was originally slated to end on Saturday.

For loans above Rs 5 lakh and up to Rs 50 lakh, interest rate has been fixed at 8 per cent during the first year and 8.5 per cent during second and third years, SBI said in a statement here.

The bank is also offering SBI MaxGain, under which it offers home loan as overdraft with possibility of saving interest.

Targeting customers buying high-end properties, the bank is offering SBI Advantage Home Loan, which would carry a fixed interest rate of 8 per cent during the first year and 9 per cent during second and third years, SBI said.  These schemes help clients to know about their loan repayment obligations at low interest rates for 3 to 5 years, the bank said.

After the offer period, customers will have the option to opt for a fixed rate with a reset frequency of 5 years or floating interest rate linked to SBI’s advance rate for the remaining loan term, SBI said.

SBI had launched these products in August this year for a limited period of three months.