The State Bank of India (SBI) has announced a reduction in its savings bank account annual interest rate to historic low of 2.75 per cent. The largest Indian commercial bank announced about the SBI savings bank account interest rate revision yesterday in a press statement. The new SBI savings bank deposit interest rates will become effective from 15th April 2020, the SBI said citing reason for the step was 'enough of liquidity' available with them.

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As per the SBI statement, "In view of adequate liquidity in the system, SBI realigns its interest rates on Savings Bank Deposits, with effect from 15th April 2020." According to the official website of the SBI — sbi.co.in — SBI savings bank deposit annual interest rate on deposits up to Rs 1 lakh and deposits above Rs 1 lakh has been fixed at 2.75 per cent from the existing 3.0 per cent.

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Indian banks are expected to discourage the bank deposits till demand for credit grows. In fact, the Government of India has also cut the postal savings interest rates. The post office time deposit now offers 5.5 per cent for one to three years tenure and 6.7 per cent for 5 years deposit tenor. While the post office savings rate is at 4 per cent, the sharpest reduction in the post savings is anyway clearing the grounds for banks for customers to migrate.