SBI cuts interest rate on all savings bank deposits to 2.75% from April 15

New Delhi: Your savings account balance in SBI will earn less than before. SBI has announced a reduction in the interest rate on savings account balance irrespective of the amount lying in the account. In view of adequate liquidity in the system, SBI has realigned its interest rates on Savings Bank Deposits, with effect from 15th April 2020.

For savings account balances up to Rs. 1 lakh, there will be a 25 bps reduction from 3 per cent to 2.75 per cent. And, on balances above Rs. 1 lakh, a similar reduction of 0.25 per cent from 3 per cent to 2.75 per cent will be there.

As of now, the interest rate continues to be at 3.00 per cent per annum (2.75 per cent per annum below RBI’s Repo Rate, with a minimum of 3.00 per cent per annum ) for balance above Rs. 1 lakh.

From April 15, 2020, the new rate of interest on savings account balance will be 2.75 per cent per annum (2.75 per cent per annum below RBI’s Repo Rate, with a minimum of 2.75 per cent per annum) for balance above Rs. 1 lakh.

Since 1st May 2019, SBI had linked the interest rate on savings bank deposits for balances above Rs. 1 lakh to the RBI’s repo rate.

Many other banks may soon resort to reducing their interest rate on the savings account balance. In times like these, it is important to keep adequate liquidity and hence most individuals will want to keep funds in the savings account. Keeping funds liquid also helps to face emergency situations such as medical exigencies and job loss.

Most financial planners suggest keeping at least 6 months of emergency cash in a savings account or short term or liquid mutual funds. In order to make your money work more for you, going forward, one will need to put surplus funds in high yielding investments that are equally safe.