SBI lowers deposit rates: the opportunity is gone !

State Bank of India (SBI) has finally succumbed to competitive and margin pressures and lowered its interest rates on fixed deposits. It has lowered its peak interest rate on the 550 day deposit by 25 bp to 8.75% from 9 November. More importantly, it has withdrawn its super - saver term deposit scheme carrying a 9% interest rate for deposit maturity of 4 to 5 years and 8.5% for over 5 years.

Revised rates wef 7 November 2007 are:

15-45 days: 5.00%
46-270 days: 5.50%
271 days to less than 1 year: 6.75%
1 year to 549 days: 8.00%
550 days: 8.75%
551 days to less than 2 years: 8.00%
2 years to less than 3 years: 8.25%
3 years and up to 10 years: 8.50%.

This move shuts the door on the opportunity of leveraging lowering property (home loan) interest rates from HDFC while gaining from relatively high deposit interest rates from SBI. Good things don't last that long !