State Bank of India has cut its savings account rate by 20 basis points to 2.5% per annum. This is the lowest ever savings account rate the bank has offered, since the deregulation of these interest rates in 2010.
The lender was earlier offering 2.7% for depositors with savings account balances below Rs 10 crore. For those with higher balances, the bank offered 3%.
India's largest lender will offer 2.5% on all eligible savings account deposits, with effect from June 15, according to a note on its website.
The rate cut comes soon after SBI announced a 50 basis point cut on all external benchmark linked lending rate loans. This rate cut would benefit all new and existing borrowers under the external benchmark regime. The lender had last week cut loan rates after Reserve Bank of India, on June 6, announced a 50 basis point repo rate cut which fell to 5.25%.
Lenders tend to cut deposit rates before passing on the benefit to existing borrowers who are under the marginal cost based lending rate regime.
SBI has also cut fixed deposit rates by up to 25 basis points, with the 1-2 year deposit rates cut to 6.25%, from 6.5% earlier. Similarly, the 2-3 year deposit rates were cut to 6.45%, from 6.7% earlier.
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