SBI cuts interest rates by 0.5% on savings accounts; current 3.5%

India's largest lender State Bank of India (SBI) on Monday cut interest rates on savings bank deposits by 0.5 per cent. 

The new interest rates on savings bank deposits will be come into effect from 31st July.

Now, for saving deposits balance up to Rs 1 crore, SBI will offer a rate of 3.5 per cent as compared to 4 percent earlier, the bank said.

However, for saving deposits balance above Rs 1 crore, rate of interest has been retained at 4 per cent per annum.

Banks were flushed with liquidity after Prime Minister Narendra Modi's demonetisation move last year. 

To promote digital banking, SBI had earlier reduced charges levied on Real-time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) transactions up to 75 per cent.

NEFT and RTGS are electronic money transaction mechanisms used to transfer money between two different bank accounts anywhere in the country.

State Bank of India had earlier slashed its one to two year deposit rates further by up to 40 basis points. Now the one year deposit with SBI will fetch you 6.75 per cent interest as against 6.90 per cent earlier.