SBI Reduces Savings Account Interest Rate to 2.75%, cuts MCLR

SBI Reduces Savings Account Interest Rate to 2.75%, cuts MCLR

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.

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