India’s largest money lender State Bank Of India on September 5, 2012 said that it announced a reduction in the interest rate on fixed deposits by 0.5 percent for most of the maturity periods. The move is now also likely to be followed by the other lenders as well.

For the deposits between 241 days and one year the downward revision is one percent. The new rate will be 6.5 percent against 7.5 percent. A total of 9 maturity periods for fixed deposits the 0.5 percent downward rate revision is for 6 categories.

A statement from the state Bank Of India said that the new rates would be effective from September 7, 2012. After the revised rates the interest rate on 7-90 days fixed deposit would come down to 6.50 percent from 7 percent.

While the term deposit 91-179 days would be down by 0.5 percent at 6.50 percent and 180 days fixed deposit would also attract 6.50 percent interest rate. The fixed deposit with 181-240 days would provide interest rate of 6.50 percent down from 7.50 percent. For one year to less than 2 year maturity period fixed deposits the new rate will be 8.5 percent against 9 percent which is down by 0.5 percent.