After SBI, Punjab National Bank revises fixed deposit interest rates
Days after the State Bank of India announced that it will reduce the interest rates on fixed deposits (FDs), the Punjab National Bank (PNB) also revised its FD interest rates. According to the bank's website, PNB has reduced its interest rates on FDs on select maturities. The revised rates will be effective from August 1, 2019. Here are more details.
FD interest rates reduced by 0.5% for 7-14day, 15-29day maturities
On fixed deposits up to Rs. 2cr, maturing in periods 7-14 days and 15-29 days, the bank is now offering an interest rate on fixed deposits of 5%. Senior citizens will be offered an interest rate of 5.5%. Previously, for the maturities, PNB was offering interest rates of 5.5% for the general public and 6% for senior citizens. Further details here: https://bit.ly/2Alcha4
FD interest rates increased for 3-5 year maturities
However, there's some good news. The bank also increased interest rates on a few other maturities. For fixed deposits maturing in 3-5 years, PNB offers a 6.5% interest rate (7% for senior citizens), which is a 0.25% increase as compared to the previous rates. These revised interest rates on fixed deposits will be effective from August 1, 2019, reads PNB's website.
PNB last revised rates in July
Notably, PNB had last revised its FD interest rates last month. The changes were effective from July 1, 2019. The bank had lowered interest rates for 7-14 day and 15-29 day maturities to 5.5% (6% to senior citizens). Previously, PNB used to offer a 5.75% interest rate on FDs of up to Rs. 2cr for maturity periods between 7-45 days.
Many other banks revised FD interest rates in July
On Monday, SBI had slashed FD interest rates across all maturities. However, it's not just SBI and PNB. In July, the Bank of Baroda, HDFC Bank, Axis Bank, Kotak Mahindra, IDFC First Bank and Federal Bank, all revised interest rates on FDs. The move came after the Reserve Bank of India (RBI) slashed repo rates by a combined 75 basis points in June.
What is repo rate?
Repo rate is the rate at which the Reserve Bank of India lends funds to commercial banks in the country. RBI uses the repo rate as a tool to control the supply of money in the economy. Repo rate is also used to control inflation where the Reserve Bank increases it to lower inflation. Repo rate cuts usually make loans cheaper.
