In a major development, the country's largest bank State Bank of India (SBI) has reduced interest rates on savings bank deposits by 5 basis points. SBI has reduced its savings deposit interest rates to 2.70 per cent across all slabs from May 31, according to its website. This is the second reduction by SBI in its interest rates on savings bank deposits in this fiscal. In April, the bank had cut savings bank deposit rates by 25 basis points (bps) to 2.75 per cent per annum across all slabs.

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The bank has two slabs for savings bank deposits -- those with balance up to Rs 1 lakh and those above Rs 1 lakh.

Interest Rates on Savings Bank Deposits

1)- SB Deposit accounts with balances upto Rs. 1 lakh - Revised Rate of Interest w.e.f. 31.05.2020 - 2.70% p.a.

2)- SB Deposit accounts with balances above Rs. 1 lakh - i) 2.70% p.a. for balance upto Rs. 1 lakh ii) 2.70% p.a. for balance above Rs. 1 lakh

Interest Rates on Savings Bank Deposits

Applicable Interest Rates on Savings Bank Deposits w.e.f 31st May, 2020

Savings Bank deposit slabs Existing Rate of Interest Revised Rate of Interest w.e.f. 31.05.2020

SB Deposit accounts with balances upto Rs. 1 lakh

 2.75% p.a 2.70% p.a.
SB Deposit accounts with balances above Rs. 1 lakh i) 2.75% p.a. for balance upto Rs. 1 lakh
ii) 2.75% p.a. for balance above Rs. 1 lakh.

 

i) 2.70% p.a. for balance upto Rs. 1 lakh
ii) 2.70% p.a. for balance above Rs. 1 lakh

Banks have been lowering their deposit rates as they have ample liquidity, but demand for fresh loans is very low.

SBI, on May 27, had slashed its retail term deposit rates by up to 40 bps across all tenors. For deposits maturing in seven days to 45 days, SBI is offering an interest rate of 2.90 per cent as against 3.30 per cent earlier. It revised rate for fixed deposits in 180 days to 210 days bracket to 4.40 per cent from 4.80 per cent earlier. Interest rate for deposits maturing in 5 years to 10 years has been cut to 5.40 per cent from 5.70 per cent earlier.

The bank has also cut interest rates for bulk deposits (Rs 2 crore and above) by up to 50 basis points.