SBI Reduces Interest Rate on Savings Account to 2.75%

SBI Reduces Interest Rate on Savings Account to 2.75%

State Bank of India (SBI), the country’s largest lender, announced on 7th April 2020 that it has cut interest rates on its saving accounts by 25 basis points (bps).

As per the new reduced rates, w.e.f. 15th April 2020, savings accounts with balances up to Rs. 1 lakh will now earn 2.75%, down from 3%. The same is applicable with balances above Rs. 1 lakh as they will also earn 2.75% a year.

How to avail SBI EMI Moratorium Instant Approved Personal Loan

Last week, ICICI Bank (a private sector bank) also cut the interest rate on its savings account by 25 bps, after which, savings account with balance up to Rs. 50 lakhs will earn 3.25% a year and an account with balance above Rs. 50 lakhs will earn 3.75% w.e.f. 9th April, 2020.

No minimum balance required for SBI savings bank accounts

Last month the bank had waived the requirement of maintaining average monthly balance for savings accounts. From the month of March this year, the facility of zero balance in savings bank accounts is available to all SBI customers. According to the SBI press release, this will benefit around 44.51 crore savings bank account holders.

Apart from reducing the savings deposit rates, the bank has also cut its marginal cost fund-based lending rates (MCLR) by 35 bps across all tenures. (1 basis points/bps = 0.01%). The 1-year MCLR comes down to 7.4% p.a. from 7.75% p.a., w.e.f. 10th April 2020. This is the 11th consecutive cut in SBI’s MCLR in FY 2019-20. Consequently, home loan EMIs (linked to MCLR) will get cheaper by around Rs. 24 per 1 lakh on a 30 year loan.

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