SBI's new interest rate plan brings more transparency but is more volatile

SBI customers will need to be alert to changes in interest rates of savings account and overdraft facility

The State Bank of India (SBI) has linked its savings deposit rate and its cash-credit and overdraft rate to an external benchmark - the repo rate, which is 6 per cent, currently. Applying a discount of 275 basis points (bsp), SBI will now offer an interest rate of 3.25 per cent to customers who maintain a balance in their savings account of above Rs 1 lakh. Similarly, a premium will apply to the repo rate to arrive at an interest rate of 8.25 per cent on cash credit (CC) and overdraft (OD) facilities with sanctioned limit of above Rs 1