AGENCIES, Kolkata: The State Bank of India (SBI) on Wednesday announced that it has cut interest on savings bank accounts to 3% and also waived its minimum balance requirement as it set the trend of lowering interest rates in the banking sector.
The country’s largest lender has 44.51 crore savings bank (SB) accounts.
More banks are likely to follow to the market leader in slashing interest rate on SB accounts and waiving minimum balance requirements.
Earlier in the day, SBI reduced its fixed deposit rates and marginal cost of funds-based lending rates (MCLR) for various tenors.
SBI said it has also waived SMS charges, which will bring significant relief to all the customers.
Currently, the interest rate on SB accounts is 3.25% for deposits up to Rs 1 lakh in SB accounts and 3% for deposits above Rs 1 lakh.
SBI said it has decided to waive maintenance of Average Monthly Balance (AMB) for all SB accounts. “The charges on maintaining AMB are now waived off on all 44.51 crore SBI savings bank accounts,” it said.
The bank reduced interest rates for retail term deposits (less than Rs 2 crore) by 10 to 50 basis points for a few tenors.
Other products are also affected. Fixed deposits (FDs) maturing between seven to 45 days will now attract interest rate of 4% as against 4.50% earlier. Interest rates on FDs maturing in a year and above have been reduced by 10 basis points.