7 banks that cut interest rate on savings account
State Bank of India was first to slash interest rate, followed by other public and private lenders.
Mumbai: Both private sector and public sector banks have been cutting interest rates on savings account across the country.
The rate-cutting spree started with India’s largest bank State Bank of India slashing its interest rate on savings account. Soon, top banks of the country followed suit.
Experts have contributed the rate-cutting to a decrease in real interest rates and in the rate of inflation. This has led to surplus money lying with banks and low profitability levels.
Experts also suggest consumers to not leave around money idle in savings account deposit as they are going to earn lesser. Instead, putting it to use through other financial instruments is more advisable.
Here are the seven banks which slashed their interest rates:
1. State Bank of India (SBI): SBI cut its interest rate with the introduction of its two-tier savings account interest rate system. Deposits below Rs 1 crore would attract 3.5 per cent interest rate, while deposits above Rs 1 crore would attract 4 per cent interest.
2. Bank of Baroda: The bank reduced interest rate on deposits of up to Rs 50 lakh to 3.5 per cent. Deposits above Rs 50 lakh would attract 4 per cent interest rate.
3. Axis Bank: The private player also cut interest rate on savings account to 3.5 per cent for deposits up to Rs 50 lakh. Deposits above Rs 50 lakh would attract 4 per cent interest rate.
4. Indian Bank: The bank would pay 3.5 per cent interest on deposits up to Rs 50 lakh, while for deposits above Rs 50 lakh would get 4 per cent interest.
5. Karnataka Bank: The bank reduced interest rate such that deposits below Rs 1 lakh would earn 3 per cent interest. Deposits in the range of Rs 1 lakh and Rs 50 lakh would attract 3.5 per cent interest. Balance in the range of Rs 50 lakh to Rs 1 crore would earn 4 per cent interest. The bank would pay interest of 5 per cent on balance above Rs 1 crore.
6. Yes Bank: Yes Bank reduced the interest rate on savings account to 5 per cent on deposits of less than Rs 1 lakh. Balance above Rs 1 lakh and less than Rs 1 crore would earn 6 per cent deposit. Deposits above Rs 1 crore would attract 6.25 per cent interest.
7. HDFC Bank: The latest rate cut was made by HDFC whereby an account balance below Rs. 50 lakh will now earn interest at the rate of 3.5 per cent per annum. A balance of Rs. 50 lakh and above will continue to earn interest at 4 per cent