After the State Bank of India (SBI) and HDFC Bank, state-run Punjab National Bank (PNB) has cut interest rates on fixed deposits (FD) by 0.50 percentage point on select maturities, according to the official website of the public sector bank, i.e. pnbindia.in. The revision has come into effect from today, September 1, 2019 itself.
As per the statement released by PNB, the lender is offering an interest of 4.5 per cent to general customers for fixed deposits up to Rs 2 crore on maturity periods such as 7-14 days or 15-29 days. Prior to this, the bank was paying an interest rate of 5 per cent to general customers on the above-mentioned FD maturities.
For fixed deposits of 1-3 years maturity period, general customers will now get an interest of 6.5 per cent as the PNB has lowered its interest rates by 0.25 percentage point. In all the FD maturities, rates offered to senior citizens are 0.5 per cent higher than the regular customers.
The move follows the rate cut on fixed deposits by the country's largest lender State Bank of India (SBI) on August 23. SBI revised its interest rate on Term Deposits with effect from August 26, 2019, in view of the falling interest rate scenario and surplus liquidity. Another private sector lender, which revised its FD rates recently, is HDFC Bank.
The SBI slashed its FD rates just after the Reserve Bank of India (RBI) in its third bi-monthly policy had reduced repo rate by 35 basis point (from 5.75 per cent to 5.40 per cent) with effect from August 7, 2019.
A fixed deposit (FD) is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. Customers need to choose an investment amount and a deposit period ranging between 7 days to 10 years. The interest rate typically ranges from 5.75 per cent to 7.50 per cent in a year but varies from bank to bank based on the investment and tenure.
In a major development, the government on Friday announced merger of Oriental Bank of Commerce and United Bank with Punjab National Bank (PNB) to form the country's second largest public sector bank, after State Bank of India (SBI), having a business of Rs 17.95 lakh crore.