SBI Cuts Savings Rate to 3.25%; Is It Time to Move Your Money to Another Bank?

Small accountholders at State Bank of India (SBI) received a jolt when the public sector lender reduced the interest rate on savings bank account with a balance below Rs 1 lakh by 25 basis points to just 3.25%, its lowest ever, with effect from November 1.

This made accountholders look at other banks and financial institutions like payments banks in order to earn a higher interest rate on their savings deposits. Here’s a list of how SBI’s 3.25% interest rate compares to the rates offered by other banks:

— HDFC Bank offers 4% interest rate on deposits below Rs 50 lakh in a savings account. If an accountholder has over Rs 50 lakh, then it will attract 3.5% interest.

— ICICI Bank offers 4% interest rate on the savings bank account.

— Axis Bank is also offering 4% interest rate on savings below Rs 50 lakh. For more than Rs 50 lakh, the interest rate is 3.5%.

— Private lender Kotak Mahindra Bank offers one of the highest interest rates, 6%, for saving deposits between Rs 1 lakh and Rs 1 crore. For saving deposits between Rs 1 crore and Rs 5 crore, the interest rate is 5.5%, while for saving deposits balance up to Rs 1 lakh is 5% per annum.

— Yes Bank offers 6.25% per annum for saving deposits above Rs 1 crore. For deposits between Rs 1 crore and Rs 5 crore, the interest rate is 6%, while it is 5% for savings balance up to Rs 1 lakh.

— Bandhan Bank offers its customers an interest rate of 4.25% per annum paid half-yearly for accounts with a daily balance of up to Rs 1 lakh, while it offers 5% for accounts with a daily balance of over Rs 1 lakh.

— IndusInd Bank offers 4% per annum on savings account with a daily balance of up to Rs 1 lakh. On accounts with a daily balance between Rs 1 lakh and Rs 10 lakh, the interest rate is 5% per annum, while for those with a daily balance above Rs 10 lakh, it is 6% per annum.

— RBL Bank offers 7.1% per annum on savings account with a daily balance above Rs 10 lakh. On accounts with a daily balance between Rs 1 lakh and Rs 10 lakh, the interest rate is 6.1% per annum, while for those with a daily balance up to Rs 1 lakh, it is 5.1% per annum.