SBI Cuts FD And Savings Account Rates After RBI Repo Reduction: Check New Interest Rates

Following the Reserve Bank of India’s recent repo rate cut to 5.5%, several top banks have revised their fixed deposit (FD) rates. The State Bank of India (SBI) is the latest lender to announce a revision in its FD and savings account interest rates across tenures.

The RBI reviews the repo rate regularly during its bi-monthly Monetary Policy Committee (MPC) meetings to address concerns such as inflation. After reducing the repo rate to 6% in April, in its latest monetary policy for the June cycle, the apex bank reduced the key lending rate by 50 basis points, marking a third consecutive reduction this year.

The repo rate is the interest rate at which the RBI lends to commercial banks. With borrowing now turned cheaper, banks have also reduced interest rates for customers. When borrowing is expensive, banks offer higher fixed deposit rates to attract more funds.

SBI, the country's largest lender, has also joined other banks with a reduction in its FD and savings bank account interest rates, which comes into effect from June 15.

For instance, SBI’s FD rates for one to two-year periods, earlier pegged at 6.5%, have now been revised to 6.25%. To be clear, this does not include FD rates for senior citizens, which are slightly higher than regular FDs.

For senior citizens, one-year FDs were earlier attracting 7% interest rates, but have now been lowered to 6.75% p.a., as seen on the bank’s website. Similarly, the rate for two- to three-year regular FDs has been revised by the SBI from 6.7% to 6.45% per annum.

Change In SBI Savings Bank Deposit Rates

Effective June 15, the interest rate on SBI savings bank deposits has been revised to 2.5% per annum. This rate applies uniformly across all account balances, as per the latest update from the bank. Earlier, the lender was offering a 2.75% interest rate on savings accounts for balances below Rs 10 crore.

Apart from SBI, several other leading lenders have also recently revised the interest rates for their savings bank accounts. HDFC Bank is also offering an interest rate of 2.75% per annum on savings accounts, applicable uniformly across all account balances. From June 8, the Bank of Maharashtra has also lowered its savings account interest rate to 2.75%. A similar rate is being offered by Axis Bank for balances below Rs 2,000 crore from June 12.

Meanwhile, HDFC Bank, India’s largest private lender, has also revised its rates for FDs of less than Rs 3 crore from June 10. The bank has lowered its interest rate on FDs to 6.25% for 1 year to less than 15 months for regular customers, and 6.75% for senior citizens under the same tenure. Similarly, Bank of Maharashtra is offering a 6.25% rate for up to Rs 3 crore FDs for a period of one year from June 10.

Private lender Axis Bank has also revised its fixed deposit rates effective June 12, lowering them to 6.25% per annum for deposits below Rs 3 crore, with a one-year tenure.