Top Indian Banks Slash Savings Rates: SEBI RA Mayank Singh Chandel Warns Of Value Erosion

The analyst said that the recent savings rate cuts by SBI, HDFC Bank, and ICICI Bank follow the RBI’s 50-basis-point repo rate reduction, which has made borrowing cheaper for banks.

Major Indian banks have slashed savings account interest rates in June, cutting returns for depositors across the board, according to SEBI-registered analyst Mayank Singh Chandel.

State Bank of India reduced its savings rate to a flat 2.5% effective June 15, while HDFC Bank and ICICI Bank lowered theirs to 2.75%. 

Chandel noted that the changes apply to all account holders and follow the Reserve Bank of India’s 50-basis-point repo rate cut, which has made borrowing cheaper for banks and triggered a downward adjustment in deposit rates.

He said depositors earning just 2.5% are losing value daily, particularly when adjusted for inflation. 

For instance, a ₹5 lakh balance in SBI now earns ₹12,500 annually, down ₹1,000 from the earlier rate.

Chandel pointed out that some smaller private banks offer more competitive rates — up to 6.75% at RBL Bank, 6.25% at Federal Bank, and 5% at IndusInd Bank. 

He said smart savers are responding by exploring high-yield savings accounts, parking surplus funds in short-term fixed deposits or liquid funds, and diversifying their holdings to protect purchasing power.

At the time of writing, State Bank of India traded at ₹789.2, down 0.4%; HDFC Bank at ₹1,927.6, down 0.1%; and ICICI Bank at ₹1,413.20, down 0.7%.

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