The country’s largest lender State Bank of India (SBI) has reduced its savings bank account rate by up to 50 basis points (bps) across all account balances, effective June 15.
The bank has also reduced its interest rates on fixed deposits below Rs 3 crore by 25 basis points on different maturities. The new interest rates are applicable from June 15. The move follows a 50 bps reduction in the repo rate – the key policy rate – by the Reserve Bank of India (RBI) last week.
The reduction in interest rates by SBI on savings bank account and fixed deposits will impact depositors, especially senior citizens, who are dependent on interest earned from funds parked with banks.
The lender has revised its savings bank deposits rate to 2.5 per cent on all account balances. Prior to this, SBI was offering a rate of 2.7 per cent on account balances below Rs 10 crore, and 3 per cent on balances of Rs 10 crore and above.
On fixed deposit rates, or retail domestic term deposits, SBI has cut interest rates to 6.05 per cent for the general public on deposits maturing between 211 days to less than one year, compared to 6.3 per cent earlier. The lender has revised fixed deposits rate to 6.55 per cent for senior citizens on the same tenor, compared to 6.8 per cent earlier.
For deposits maturing in one year to less than two years, the revised interest rate is 6.25 per cent compared to 6.5 per cent. Senior citizens will now be offered a rate of 6.75 per cent on the similar maturity, compared to 7 per cent earlier.
The bank is now offering an interest rate of 6.45 per cent on term deposits maturing in two years to less than three years, as against the earlier rate of 6.7 per cent. For the same maturity, the interest rate for senior citizens has been reduced to 6.95 per cent from 7.2 per cent.
For fixed deposits maturing between three years to less than five years, and those between five years to up to 10 years, the revised rates are 6.3 per cent and 6.05 per cent, respectively.
The lender has also revised its repo-linked external benchmark-based lending rate (EBLR) by 50 bps, effective June 15. It is now offering interest rates on home loans in the range of 7.5 per cent to 8.45 per cent.
Following the RBI’s 50 bps cut in the repo rate, many lenders including Canara Bank, Union Bank of India, Bank of Maharashtra and Indian Overseas Bank have already reduced their repo-linked lending rates.
State-run Bank of Baroda has reduced its marginal cost of funds based lending rate (MCLR) by five bps across tenors from one month to one year. It has also lowered deposit rates in select maturity tenors. Many lenders have also reduced their fixed deposits rates.
and ICICI Bank have lowered their interest rates on fixed deposits below Rs 3 crore by 25 bps. HDFC Bank has revised the interest rate on savings bank account. The bank is now offering a uniform rate of 2.75 per cent on all savings balances. The bank was earlier offering a rate of 2.75 per cent on balances below Rs 50 lakh and 3.25 per cent on balances of Rs 50 lakh and above.
