New Delhi, July 31: The State Bank of India (SBI) has cut the interest rates it offers to its savings account holders who keep deposit below Rs 1 crore. The largest bank of the country announced the new interest rate on Monday– the bank customers will get 3.5 per cent on their savings. Earlier, SBI used to give 4 per cent interest to its customers. It is expected that other banks will follow suit and slash their interest rates on savings accounts. Also Read - SBI Apprentice Exam 2021 Postponed. Check Fresh Details Here

The new tax rate will be applicable from July 31 itself. As of now, other banks have not announced any reduction in rates. Accounts with deposit more than Rs 1 crore will continue getting 4 per cent interest. Also Read - SBI Home Loan Gets Cheaper As Bank Reduces Interest Rates, Waives Processing Fee Till March 31

“The Bank is introducing 2 tier saving bank interest rate w.e.f. 31st July, 2017. While balance above Rs 1 crore will continue to earn interest rate at 4% per annum, interest rate at 3.5% per annum shall be offered on balances of Rs 1 crore and below,” SBI said in a press release, quoted by Business Standard. (Also read: SBI reduces NEFT, RTGS charges up to 75%) Also Read - SBI to Conduct Mega Property E-auction on 5th March. Here's All You Need to Know & Participate

The rate cut is due to high real interest rates and the slow rate of inflation.The revision will help the bank maintain the marginal cost based lending rates, benefiting segments of other borrowers including SME, agriculture and real-estate.