State Bank of India announced a reduction in the interest rate on all savings bank (SB) accounts on Wednesday to 3 per cent in a move likely to affect close to 45 crore account holders across the country.
The bank also announced the decision to waive off the requirement for maintaining a minimum balance in Savings Bank (SB) accounts. It also said its SMS alert service will be offered free of cost.
“Bank has also rationalised interest rate on SB Account to a flat 3 % p.a. for all buckets,” PTI quoted SBI as saying.
The interest rate on SBI saving bank accounts was 3.25 per cent for deposits up to Rs 1 lakh currently and 3 per cent for deposits above Rs 1 lakh.
While the reduction in interest rate will hurt small investors, the doing away of the minimum average balance requirement is likely to bring them a big relief.
SBI customers need to maintain Rs 3,000 as average monthly balance (AMB) in metro areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. The waiver is going to benefit a whopping 44.51 crore savings account held by the bank’s country-wide network, a PTI release said.
The decision does away with the penalty levied in the range of Rs 5 to Rs 15 plus taxes for non-maintenance of AMB. SBI had reintroduced AMB penalties in April 2017 after a gap of five years and had reduced it within the first 6 months in September 2017 to Rs 3000 from Rs 5000. It had also lowered the penalties for non-maintenance.
Pensioners, government aid beneficiaries and minors were exempted from the minimum balance requirement.
SBI LOCKER RENTALS REVISED
India’s largest Bank has also announced a steep hike in locker rental charges on Wednesday. The proposed changes that will come into effect from March 31, 2020, will see small locker rentals go up by Rs 500 to Rs 2000 from Rs 1500 currently.
Medium locker charges will go up by Rs 1000 to Rs 3000 from the current slab of Rs 2000. Rentals for big sized lockers will rise by Rs 2000 from the Rs 6,000 charged currently and for extra-large lockers in metros across the country, customers will have to shell out Rs 12,000 a year as against Rs 9,000 currently.
Similarly, for rural customers, the rental for a small locker will go up to Rs 1500 from Rs 1000, Rs 3,000 from Rs 2,000 annually for medium-sized lockers, Rs 6,000 from Rs 5,000 for big sized lockers and Rs 9,000 from Rs 7,000 annually for extra-large lockers.
SBI also revised their export-related service charges effective September 1. The bank claims it was being done to improve the ease of doing business and to provide exporters with a clear cost structure.
SBI had earlier done away with the Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) charges for its mobile app YONO, internet and mobile banking customers.
Currently, the interest rate on saving bank accounts is 3.25 per cent for deposits up to Rs 1 lakh in SB accounts, and 3 per cent for deposits above Rs 1 lakh.
SBI,savings account,interest
Currently, SBI customers need to maintain AMB of Rs 3,000, Rs 2,000 and Rs 1,000 in metro, semi urban and rural areas, respectively.
SBI has revised rationalise interest rates on saving accounts to 3%
SBI has done away with the requirement for minimum balance in saving accounts
Bank has raised rentals for lockers.
State Bank of India announced a reduction in the interest rate on all savings bank (SB) accounts on Wednesday to 3 per cent in a move likely to affect close to 45 crore account holders across the country. The bank also announced the decision to waive off the requirement for maintaining a minimum balance in Savings Bank (SB) accounts. It also said its SMS alert service will be offered free of cost.
“Bank has also rationalised interest rate on SB Account to a flat 3 % p.a. for all buckets,” PTI quoted SBI as saying.
The interest rate on SBI saving bank accounts was 3.25 per cent for deposits up to Rs 1 lakh currently and 3 per cent for deposits above Rs 1 lakh.
While the reduction in interest rate will hurt small investors, the doing away of the minimum average balance requirement is likely to bring them a big relief. SBI customers need to maintain Rs 3,000 as average monthly balance (AMB) in metro areas, Rs 2,000 in semi-urban areas and Rs 1,000 in rural areas. The waiver is going to benefit a whopping 44.51 crore savings account held by the bank’s country-wide network, a PTI release said.
The decision does away with the penalty levied in the range of Rs 5 to Rs 15 plus taxes for non-maintenance of AMB. SBI had reintroduced AMB penalties in April 2017 after a gap of five years and had reduced it within the first 6 months in September 2017 to Rs 3000 from Rs 5000. It had also lowered the penalties for non-maintenance.
Pensioners, government aid beneficiaries and minors were exempted from the minimum balance requirement.
SBI LOCKER RENTALS REVISED
India’s largest Bank has also announced a steep hike in locker rental charges on Wednesday. The proposed changes that will come into effect from March 31, 2020, will see small locker rentals go up by Rs 500 to Rs 2000 from Rs 1500 currently. Medium locker charges will go up by Rs 1000 to Rs 3000 from the current slab of Rs 2000. Rentals for big sized lockers will rise by Rs 2000 from the Rs 6,000 charged currently and for extra-large lockers in metros across the country, customers will have to shell out Rs 12,000 a year as against Rs 9,000 currently.
Similarly, for rural customers, the rental for a small locker will go up to Rs 1500 from Rs 1000, Rs 3,000 from Rs 2,000 annually for medium-sized lockers, Rs 6,000 from Rs 5,000 for big sized lockers and Rs 9,000 from Rs 7,000 annually for extra-large lockers.
SBI also revised their export-related service charges effective September 1. The bank claims it was being done to improve the ease of doing business and to provide exporters with a clear cost structure.
SBI had earlier done away with the Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) charges for its mobile app YONO, internet and mobile banking customers.
HOW IS AVERAGE MONTHLY BALANCE CALCULATED
A simple definition of AMB means the balance on a deposit account averaged over a given period, usually done on a daily basis or monthly basis. The calculation is done taking the daily closing balances into the account. Suppose one account had Rs 3000 on 5 days in the month of March, Rs 2000 for 7 days, Rs 1000 for 10 days and Rs 500 for 8 days and Rs 100 for a day out of the 31 days in the month, then the AMB for March will be calculated by first calculating average balance for all the uniform amounts in the account at the end of the day.
Rs 3000 X 5 = Rs 15,000 balance for 5 days
Rs 2000 X 7 = Rs 14,000 balance for 7 days
Rs 1000 X 10 = Rs 10,000 balance for 10 days
Rs 500 X 8 = Rs 4,000 balance for 8 days
Rs 100 X 1 = Rs 100 balance for 1 day
The results will then be added and divided by the number of the days of the month to arrive at the AMB.
Rs 15,000 + Rs 14,000 + Rs 10,000 + Rs 4,000 + Rs 100 = Rs 43100
The AMB for month of march in this case will be Rs 43100/31 = Rs 1390.3 reported PTI.
