Many banks have cut the savings account rates to encourage customers to hold less money and spend more. Banks have lowered interest rates after the Reserve Bank of India(RBI) reduced the repo rate by 40 basis points on May 22 after the monetary policy review meeting.
After the RBI announcement, the repo rate for banks are now at 4 per cent and reverse repo rate at 3.35 percent . To boost the economy , the central bank has cut rates at a higher rate since the lockdown started in India.
These slashing down of rates are due to excess liquidity with banks and low demand for fresh loans.
List of banks that have cut savings account rates
State Bank of India:
SBI is the India’s largest public-sector lender. On June 02, SBI reduced interest rate on savings bank deposits by 5 basis points to 2.70 percent per annum. The revised interest rate was implemented from May 31 , 2020
The bank has two slabs for savings bank deposits- balance up to Rs 1 lakh and above Rs 1 lakh balance.
It was the second reduction in Fixed Deposits rates by the lender in May. In April, the bank had reduced its savings bank deposits rate by 25 basis points to 2.75 percent per annum across all slabs.
ICICI Bank :
ICICI Bank said it has cut the interest rates on saving deposits by 25 basis points. The new rates will be applicable from June 04.
The interest rates had been cut on all deposits of less than Rs 50 lakh to 3 percent, a reduction of by 25 basis points as against the existing 3.25 percent.
For deposits of Rs 50 lakh and above, the account holders will be earning an interest of 3.50 percent, down from 3.75 percent currently.
Axis Bank :
Axis Bank slashed interest rate on savings account on June 01 by 25 basis points.
The interest on savings account for balance up to Rs 50 lakh has been brought down to 3.5 percent. For balance above Rs 50 lakh, the interest rate stands at 3.5 percent.
Kotak Mahindra Bank :
The interest rates on savings accounts slashed to 3.50 percent p.a on balance up to Rs 1 lakh. On balance above Rs 1 lakh, the same is 4 percent.
The interest rates will also be the same for Basic Savings Bank Deposit Account/Small Account holders.
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