SBI Cuts Rates Again—Will Your Fixed Deposits Take a Hit?

State Bank of India has lowered its savings account interest rate to 2.5 percent, the lowest it has ever been. This change took effect on June 15 and applies to all account balances. At the same time, SBI has reduced fixed deposit rates by 25 basis points across all tenures for retail customers with deposits up to Rs 3 crore.

 

These moves come after the Reserve Bank of India cut the repo rate by 50 basis points recently. Following the RBI’s decision, several banks, including SBI, have adjusted their deposit rates to reflect the new policy environment.

 

For fixed deposits, the general interest rate is now 6.6 percent per year, down from 6.85 percent. Senior citizens will earn 7.1 percent, while those over 80 years old get 7.2 percent. The popular Amrit Vrishti scheme, which offers a 444-day FD, has also seen its rate drop by 25 basis points.

 

Along with cutting deposit rates, SBI has reduced its lending rates by 50 basis points. The best home loan rate now stands at 7.5 percent, which should help borrowers save on interest costs.

 

These changes will affect many people, especially those who rely on fixed deposit interest as a source of income. While lower deposit rates mean less return for savers, the move helps banks manage their costs as lending rates come down.

 

Sources: Times of India, Indian Express, Economic Times