New Delhi: The State Bank of India (SBI) cut interest on savings bank accounts to three per cent and also waived minimum balance requirement, as it set the trend of lowering interest rates in the banking sector. The country’s largest lender has 44.51 crore savings bank (SB) accounts.
More banks are likely to follow to the market leader in slashing interest rate on SB accounts and waiving minimum balance requirements.
Earlier in the day, SBI reduced its fixed deposit rates and marginal cost of funds-based lending rates (MCLR) for various tenors.
Keeping in mind the ‘Customers First’ approach, the bank said it has also waived SMS charges, which will bring significant relief to all the customers.
“The Bank has also rationalised interest rate on SB account to a flat 3% pa for all buckets,” SBI said in a statement.
Currently, the interest rate on SB accounts is 3.25 per cent for deposits up to Rs 1,00,000 and 3 per cent for deposits above Rs 1,00,000.
SBI also said it has decided to waive maintenance of average monthly balance (AMB) for all SB accounts. “The charges on maintaining AMB are now waived off on all 44.51 crore SBI savings bank accounts,” it said.
Currently, SBI customers need to maintain AMB of Rs 3,000, Rs 2,000 and Rs 1,000 in metro, semi urban and rural areas, respectively. The bank used to levy a penalty of Rs 5 to Rs 15 plus taxes on non-maintenance of AMB.
Making it the second reduction in as many months, the public sector bank reduced interest rates for retail term deposits (less than Rs 2 crore) by 10 to 50 basis points for a few tenors.
Fixed deposits (FDs) maturing between seven days to 45 days will offer an interest rate of four per cent as against 4.50 per cent earlier. Interest rates on FDs maturing in one-year and above have been reduced by 10 basis points. One-year to less than two-year tenor FD will earn an interest rate of 5.90 per cent against six per cent earlier. FD for similar tenor will fetch an interest rate of 6.40 per cent instead of 6.50 per cent for senior citizens.
In February, the bank had slashed term deposits rates by 10-50 basis points in the retail segment and 25-50 basis points in the bulk segment.
Further, the one-year MCLR has been reduced by 10 basis points to 7.75 per cent from 7.85 per cent earlier, the bank said.
Agencies
State Bank of India, Savings account, Fixed deposits, Interest rates, MCLR,
