PNB, HDFC Bank cut interest rate on savings account by 0.5%

Interest Rate on Saving Bank Accounts: 7 Top Banks That Have Slashed Rates to Benefit Customers

Interest Rate on Saving Bank Accounts: 7 Top Banks That Have Slashed Rates to Benefit Customers

HDFC Bank lowered its interest rate on all savings deposits below Rs 50 lakh to 3.5%.

Another private bank Yes Bank cut saving bank interest rate by 100 basis points (one per cent) to five per cent for balance less than Rs one lakh. State Bank of India (SBI) was the first to reduce its interest rates on savings deposits worth Rs 1 crore and below to 3.5% from 4% earlier.

The new rate, which is applicable to both resident and non-resident customers, is effective from August 19 for both banks. HDFC Bank became the fifth, while PNB the sixth lender after SBI to cut interest rates on savings bank account.

On July 31, State Bank of India (SBI) slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below. The bank was followed by others including Axis Bank and YES Bank. The rate offered on deposits up to Rs 50 lakh was cut from 4% to 3.5%. Under the new structure, the interest rate revision impact on customers with lower balance is negligible while the saving bank accounts with higher balance will attract higher interest. The rate above Rs 50 lakh was not changed.

The private sector bank said that the rate remains unchanged at 6 per cent for SB deposits in the above ₹1 lakh and less than ₹1 crore slab, . "We have been cutting the term deposit rates and were watching for a right time to cut rates", said an official of a nationalised bank. Total deposits were Rs 6.71 lakh crore, an increase of 17% year-on-year. These banks include Bank of Baroda, Axis Bank, Indian Bank, Karnataka Bank, and Yes Bank. For deposits between Rs 1 lakh and Rs 50 lakh, the rate is pegged at 3.5 percent.

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