SBI Cuts Interest Rates on Home Loans & Fixed Deposits Yet Again

Updated on: 18 Jan 2024 // 2 min read // Home Loans
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Ahead of festival season in India, the largest public sector bank of the country, State Bank of India has slashed its lending and deposit rates across all tenures. This is fifth reduction in the last fiscal year and a second one in the last 30 days.

The one-year Marginal Cost of Lending Rate (MCLR) effective from today is 8.15% p.a. The banking major is persistent in transmitting rate cut benefit to most borrowers as the cut has been consistently announced throughout the year. Borrowers with five different reset periods would be able to enjoy the benefit of the lowered rate. Also, the news came at the backdrop of RBI’s announcement on linking of bank’s floating rates with external benchmarks such as repo rate and treasury bills from October 1.

In this calendar year, RBI has already slashed repo rate by 110 basis points and thus the Home Loan Interest Rates are slated to go down further. All these steps ahead of the festive season are certainly a step in direction to induce the credit demand in the coming months.

SBI MCLR Rates, Effective from 2024

TenorMCLR Rates (in % , revised)MCLR Rates (in %, previous)
One Month7.807.90
Three Month7.857.95
Six Month8.008.10
One Year8.158.25
Two Years8.258.35
Three Years8.358.45

In another development, Bajaj Housing Finance also announced a rate cut in Home Loan rates on Monday from 8.8% to 8.6% for small ticket loans up to ₹30 Lakh.

SBI Deposit Rates 

Balancing the rate cuts & surplus liquidity, the SBI has also reduced its FD Interest Rates by 20-25 basis points. The rates of bulk deposits are slashed by 10-20 bps across tenures.

In effect, other major banks have also reset their FD rates for different buckets. The banks that revised FD rates include: Axis Bank, HDFC Bank, Punjab National Bank (PNB), Bank of Baroda (BoB), Canara Bank and Kotak Mahindra Bank.

It is highly speculated that banks may soon link savings deposit rates to external benchmarks following the linking of the same with lending rates. This will help in better management of asset liability of the banks.

Revised SBI Domestic Term Deposits Rates for amount below Rs. 2 crore

Maturity PeriodRevised rates for general public (in %, with effect from 10.09.2019)Revised rates for senior citizens (in %, with effect from 10.09.2019)
7 to 45 Days4.505
46 to 179 Days5.506
180 to 210 Days5.806.3
211 Days to less than 1 year5.806.3
1 to less than 2 year6.507
2 to less than 3 years6.256.75
3 to less than 5 years6.256.75
5 to less than 10 years6.256.75