New Delhi: State Bank of India (SBI), the country’s largest lender, will slash the interest rates on the deposits in retail savings accounts from next month (November 1, 2019). It may be noted that last week bank in its statement said that in view of adequate liquidity in the system, interest rates on savings accounts with balances up to Rs 1 lakh would be lowered by 25 basis points (bps) or 0.25 percentage points. The savings account holders will earn 3.25 per cent interest against 3.5 per cent earlier. SBI has a deposit base of over Rs 28 crore.
Worth mentioning here is that earlier this month Reserve Bank of India (RBI) in its Monetary Policy Committee (MPC) decided to cut the repo rate for the fifth time by 25 basis points to 5.15 per cent while keeping its stance accommodative.
The cut in interest rates by SBI follows the reduction in repo rate by RBI. On the deposits accounts with a balance up to Rs 1 lakh will earn 3.25 per cent interest per annum, effective from November 1, 2019. However, the interest rate on the deposits with a balance above Rs 1 lakh is kept unchanged. This will continue to fetch the interest at the rate of 3 per cent per annum (2.75 per cent below RBI’s repo rate, with a minimum of 3 per cent) for the entire balance.
Earlier this month, SBI reduced interest rates on fixed deposits (FDs) by up to 30 basis points on select maturities. The lender also reduced its Marginal Cost of Funds based Lending Rate (MCLR) by 10 basis points across all tenors. “In view of the festival season and extending the benefits to customers across all segments, we have reduced our MCLR by 10 bps across all tenors,” SBI said in a statement.
SBI’s FD rate for 1 year to less than 2 years (for fixed deposits below Rs 2 crore) for the general public will now fetch a 6.4 per cent rate as compared to 6.50 per cent earlier. Meanwhile, senior citizens will get 6.90% on the same fixed deposit, the lender said. The interest rate payable to SBI Staff and SBI pensioners will be 1 per cent above the applicable rate.