SBI Reduced Term Deposit Rates by 50bps! What to Do?
State Bank of India which is India’s largest lending bank has cut its rate on term deposits up to 50bps for different maturities for an amount less than Rs.1 crore. Due to excess liquidity in the economy coupled with the credit appetite, SBI prompted to reduce its term deposit rates which will be in effect from April 29, 2017.
According to the new structure of SBI deposits rates, the deposits which are for two to three years will be offered interest at the rate of 6.25% as compared to 6.75% (earlier). In the case of senior citizens, the rates are being cut to 6.75% from 7.25%. Furthermore, for the term deposits which have a maturity between three to ten years, the rate is lowered by 10 basis points, i.e., to 6.50%. It is believed by the bank that with this rate cut the economy shall be balanced in a proper way and the liquidity flow would be controlled.
As per the updates in the market, the new rates shall be applicable for all the fresh deposits made in the bank from April 29, 2017. The rates are kept unchanged for the short-term deposits with maturity between seven days to less than two years. The highest rate offered by the bank is 6.90% for one year to 455 days deposits. The Marginal Cost of Lending Rate (MCLR) has been kept unchanged by the bank, and it is still 8%.
With this, the investors who were planning to park their funds in SBI term deposits will be provided with lower interest and thus less income. You must be wondering what you should do now. Do you still wish to park your money in the term deposits or want to gain some tremendous benefits? We have something better for you.
Mutual Funds - Benefiting the Investors
As you have understood until now that the deduction in the rates by SBI will have a great impact on the earnings of the deposits. Do you still want to go with fewer profits when you have better opportunities of gaining wealth? Mutual fund investments provide a large number of investment plans which are highly secure in terms of credibility and can help you in gaining substantial income over time.
The debt mutual funds which have investments in debentures, bonds, and money market instruments can help in earning superior benefits in the short span of time. Furthermore, if you want to park your money for a longer tenure, the equity mutual funds have a vast range of plans categorised in several classes where you can invest your money and gain superior income to create wealth.
Accordingly, though SBI has reduced the term deposit rates, the mutual funds are always there to help you in attaining the financial goals. So instead of waiting for the changes in the rates, make a smart decision of investing in the mutual funds now. At MySIPonline, you are provided with several tools and techniques along with free advisory services with which you can invest in the mutual funds in the best possible manner to create riches for your future.
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