SBI rate cut: Here are 11 banks who continue to offer higher savings interest rates

Key Highlights

• State Bank of India slashed interest rate for balance of Rs 1 crore or below to 3.5%
• As a trend setter, other banks likely too follow SBI and announce rate cut soon
• RBL Bank is charging highest interest rate on savings account

India's largest bank State Bank of India (SBI) on Monday announced the revision of interest rates on savings account of under Rs 1 crore to 3.50%. This revision was the first time in six years after Reserve Bank of India (RBI) deregulated savings bank deposit rates in 2011.

SBI said that while bank balance over Rs 1 crore will continue to earn interest at 4% per annum, interest at 3.50% per annum will be offered on balances of Rs 1 crore and below.

In a conference call, SBI Managing Director Rajnish Kumar said that the rationale for the rate cut was that the real interest rates are really high and "there was no choice for the bank but to bring down the savings bank account interest rate...We have been cutting the term deposit rates and were watching for a right time (to cut rates)."

Under the current circumstances, Kumar said the choice before the bank was to either raise the marginal cost of lending rates (MCLR) or cut savings bank interest rates. 

When asked if the bank would further cut both the lending and savings rate if RBI cuts the key repo rate in its August 2 monetary policy review, Kumar said the bank will take a call accordingly.