SBI cuts saving account rate by 0.5 pc on balance upto Rs 1 cr

New Delhi: Country's largest lender State Bank of India has slashed interest on savings account deposits by 50 basis points to 3.5 per cent on balance up to Rs 1 crore, ahead of RBI's policy review this week.

However, the bank will continue to offer 4 per cent interest on savings account balance of Rs 1 crore and above.

"The bank is introducing two-tier saving bank interest rate with effect from July 31. While balance above Rs 1 crore will continue to earn interest at 4 per cent per annum, interest at 3.5 per cent will be offered on balance of Rs 1 crore and below," SBI said in a regulatory filing.

It further said: "the decline in rate of inflation and high real interest rates are primary considerations warranting a revision in rates of interest on savings bank deposits."

SBI said revision of saving bank rate will enable the bank to maintain marginal cost of fund based lending rate (MCLR) at existing rates.