SBI savings account holder? Good news! Interest rates on deposits not to be slashed by rate unchanged

SBI interest rates: With a view to protect the interest of savings bank depositors, the State Bank of India (SBI) has decided not to reduce the savings bank interest rate further and hold the same at the existing level of 3 per cent for customers with balances above Rs 1 lac. Customers with SB balance up to Rs 1 lac will continue to get the rate of interest at 3.5 per cent, as hitherto. 

RBI in its 3rd Bi-monthly policy had reduced Repo rate by 35 bps (from 5.75% to 5.40%) with effect from 7th August 2019. Had this rate cut been transmitted to savings bank (SB) deposits, the applicable returns on SB deposits with balances above Rs.1 lac would have dropped to 2.65% (275 bps below Repo rate, i.e. 5.40%) with effect from 01st Sept 2019. 

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With effect from 1st May 2019, SBI had linked the interest rate on Savings Bank deposits (for balances above Rs 1 lac) with the Repo rate (i.e. 275 bps below Repo rate) without changing the rate of 3.50% for SB balances up to Rs. 1 lac. 

In view of the falling interest rate scenario and surplus liquidity, SBI realigns its interest rate on Term Deposits w.e.f. 26th August 2019. Bank has slashed Retail Term Deposit rates by 10-50 bps across tenors as well as Bulk Term Deposit rates by 30-70 bps across tenors.