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

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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