The country's largest lender State Bank of India (SBI) Thursday said it will reduce interest rates on domestic term deposits of five year period or more to 8.5 percent effective from Aug 7.
"State Bank of India has decided to revise downwards the interest rate on domestic term deposits for tenors five years and above to 8.5 percent per annum, with effect from Aug 7, 2012," the government-run lender said in a regulatory filing to the Bombay Stock Exchange.
The bank currently gives 8.75 percent interest on term deposits of five years or above on amounts below Rs.15 lakh. On term deposits on amounts from Rs.15 lakh to less than Rs.1 crore, the annual interest rate is 9 percent.
Effective from Aug 7, the bank will offer same interest rate of 8.5 percent on both these categories - below Rs.15 lakh and Rs.15 lakh to less than Rs.1 crore.
Other rates will remain unchanged. SBI currently offers the highest interest rate of 9 percent on term deposit of one year to less than two year period.
SBI had Wednesday announced 0.50 percent cut in interest rates on home and car loans.