Sbi cuts savings account interest rates!

Oops! This is a first where the interest rates people got for parking funds in banks have been cut by 0.5% by SBI.

This is quite a big move and will impact everyone in India and have a cascading effect on the other interest rates provided by other instruments like ppf and epf.

Usually banks would cut fixed deposit rates which would only impact people who did FDs.. but with this move ( am sure the government had something to do with this ) the impact is going to be far reaching.

There are some banks today that provided much higher rates of return on savings accounts like kotak and yes bank. NOW they also will be looking to cut these rates .

The reasoning for the cut in these rates is of course the fact inflation has come down significantly to below 2% and hence the real rate of interest is too high .

I am hoping that this will also push credit card companies to also cut their interest rates and home finance companies to reduce their rates.

It's always great to be a banker and to lend to retail customers like you and me , they have absolutely zero risk.. we continue to pay emi even though the house is not ready , to reduce the rates of interest we need to pay fees , because the banks don't reduce by themselves , they cut interest rates and keep the profit for themselves or these benefits help fund their NPAs which they created because of bad practices

Being a bank is great.. it's simplefinancialsense