Important! SBI Bank to cuts interest rates on its savings account from November 1; check details
SBI Bank Customers Alert: Are you SBI customer and have saving account with the bank? Then this news is very important for you as State Bank of India (SBI), India's largest public sector bank is all set to reduce the interest rates on deposits in retail savings accounts from November 1, 2019.
The bank, in a statement last week said that "in view of the 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."
Interest Rate on Savings Bank Deposits w. e. f. 31/07/2017| S. No. | Particulars | Rate of Interest |
| i) | Savings Deposits Balance upto Rs. 1 crore | 3.50% p.a. |
| ii) | Savings Deposits Balance above Rs. 1 crore | 4.00% p.a. |
The cut in the interest rate of SBI savings account follows a reduction in the repo rate.
Repo rate is a key interest rate at which it lends short-term funds to commercial banks - by the Reserve Bank of India (RBI).
SBI has announced a revision from 3.50 per cent to 3.25 per cent on balance amount up to Rs. 1 lakh from November 1, 2019, on savings account. Meanwhile, the interest rates on savings account deposits above Rs. 1 lakh has been kept unchanged.
Earlier this month, the Reserve Bank of India (RBI) cut the key repo rate by 25 basis points, from 5.40 per cent to 5.15 per cent. Reverse repo rate adjusted to 4.90 per cent and bank rate at 5.40 per cent, accordingly.
SBI had linked its large savings deposits rates to the RBI's repo rate this year in May, offering an interest rate of 275 basis points lower the repo rate on savings account deposits with balance of over Rs. 1 lakh. SBI has also cut fixed deposit (FD) interest rates by 10 basis points across select maturities.
Meanwhile, the State Bank of India (SBI) has revised the minimum balance rules and SBI bank account holder needs to keep a certain amount of money in their savings accounts or will have to pay a hefty penalty.
The SBI bank has prescribed certain average monthly balances (AMB) for those holding savings accounts at its four types of branches. The customers who hold savings accounts at metros or semi-urban branches are required to maintain an average monthly balance of Rs 3,000, according to the lender's corporate website - sbi.co.in.
Read average monthly balances (AMB) rules and its penalty here.
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