Yesterday (April 7, 2020) State Bank of India announced to reduce the interest rate on a savings account to 2.75%. It is a reduction of 0.25% as compared to earlier interest rates which were 3.00%.
New rates will be applicable from April 15.
Now the savings accounts having balances up to 1 lakh will earn interest at 2.75% (currently 3.00%) and in a similar fashion, savings accounts with balances above Rs. 1 lakh will also earn interest rate at 2.75%.
Along with that, SBI announced reduction in MCLR (Marginal Cost-based Lending Rates) to 0.35%. This will make home loans and other retail loans cheaper than before. Earlier the One-year MCLR was 7.75% that would be now 7.40% as per new orders.
SBI has reduced it 11 times consecutively in a year.
Let’s see the existing MCLR with revised MCLR rates applicable from April 15.
| Tenor | Existing MCLR | Revised MCLR
(w.e.f. 15.04.2020) |
| Overnight | 7.45% | 7.10% |
| One Month | 7.45% | 7.10% |
| Three Month | 7.50% | 7.15% |
| Six Month | 7.70% | 7.35 |
| One Year | 7.75% | 7.40% |
| Two Years | 7.95% | 7.60% |
| Three Years | 8.05% | 7.70% |
Source: SBI bank website
With new MCLR, home loan EMIs may get cheaper by Rs. 24.00 per 1 lakh on a 30-year loan approximately.
SBI is not the only bank that has reduced savings account interest rates, ICICI has also announced a cut in interest rates on savings accounts and fixed deposits upto 0.50% w.e.f. April 9, 2020.
