SBI cuts deposit rates to 2.5%, lowest in industry

The country’s largest lender State Bank has slashed the interest rate on savings bank deposits by a hefty 25-50 bps to 2.5% from the existing 2.7%, the lowest on record.

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The rate reduction for the deposits is a disincentive for the small savers. The decision comes within days of the bank passing on the 50 bps repo rate cut by the central bank to borrowers effective June 15.

SBI’s savings bank deposits rate of 2.5% will be application on all account balances. Prior to this, it was offering 2.7% on account balances below “10 crore, and 3% on balances of “10 crore and above. Its rivals HDFC Bank and ICICI Bank offer savings account rate of 2.75%. HDFC Bank and ICICI Bank have so far lowered their interest rates on fixed deposits below “3 crore by 25 bps.