State Bank of India cuts interest rates on savings accounts, fixed deposits
- SBI announced revision in interest rate on savings accounts with balances up to Rs 1 lakh from 3.50% to 3.25% w.e.f. November 1
- Bank also slashed its retail and bulk term deposit rates by 10 bps and 30 bps respectively for 1 year to less than 2 years tenor w.e.f. October 10
- The interest rates on savings account deposits above Rs 1 lakh has been kept unchanged
In a second press release issued by the bank, it announced that, “In view of the adequate liquidity in the system, State Bank of India announced revision in interest rate on Savings Bank Deposits (with balances up to Rs 1 lakh) from 3.50% to 3.25% w.e.f. 1st November 2019. Bank also slashes its Retail TD and Bulk TD interest rates by 10 bps and 30 bps respectively for ‘1 year to less than 2 years’ tenor w.e.f. 10th October, 2019.”
The interest rates on savings account deposits above Rs 1 lakh has been kept unchanged.
This is a U-turn from the bank’s stance in August. Despite a repo rate cut by the Reserve Bank of India (RBI) in August, SBI stated that it will keep interest rates on savings account unchanged. In its press release issued in August it said that, “With a view to protect the interest of Savings bank depositors, State Bank of India has decided not to reduce the savings bank interest rate further and hold the same at the existing level of 3.00% for customers with balances above Rs.1 lac. Customers with SB balance upto Rs.1 lac will continue to get the rate of interest at 3.50%, as hitherto.”
SBI is probably the only bank where its savings account rates are linked to the RBI’s repo rate. With effect from May 1, 2019, SBI had linked the interest rate on savings bank deposits (for balances above Rs 1 lakh) with the repo rate without changing the rate of 3.5 percent for those accounts with balances up to Rs 1 lakh.
With regards to fixed deposit rates, the bank has yet again cut rates. This is in line with the general trend seen in this space as most banks have been cutting rates on their fixed deposits over the past few months.
Here is a look at SBI’s fixed deposit (below Rs 2 crore) rates with effect from October 10: