India’s largest public sector bank, State Bank of India (SBI), is set to reduce the interest rates on savings bank accounts from today, i.e., from November 1, 2019.
Slashing rates
SBI will cut interest rates on savings accounts with a balance of up to Rs 1 lakh by 25 basis points. A basis point is a hundredth of a percentage point. Savings account holders of the bank will now get 3. 25 percent interest instead of the current 3.5 percent. This decision to cut interest rates on saving accounts comes as the bank has enough liquidity.
Interest rates on fixed deposits were reduced by SBI by 0.10 percentage point from 6.5 percent to 6.4 percent after the RBI (reserve bank of India) cut repo rate by 25 basis points to 5.15 percent on October 4. Customers can visit SBI bank's website for in-depth information regarding the changes in rates.
Accounts with deposits of over Rs 2 crore will also have their rates slashed. Interest rates on fixed deposits are also slashed by 30 basis points from 6.3 percent to 6 percent for a tenure of one to two years.
After RBI directed banks to link their loan rates to the parameters set by the RBI, one of which includes the repo rate, many banks have brought down the rate of interest on their various deposit schemes. Many banks also brought down their lending rates after the RBI's rate cut.
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