After SBI, BOI slashes interest rate to 3.5% for deposits up to Rs 50 lakh

Public lender Bank of India has reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent on deposits of up to Rs 50 lakh.

However, the bank will continue to pay 4 per cent interest on deposits of above Rs 50 lakh.

"The bank is introducing two tier saving bank rate with effect from today," Bank of India said in a regulatory filing today.

BOI said customers maintaining savings bank balance up to Rs 50 lakh will get 3.5 per cent while those maintaining above Rs 50 lakh will continue to earn an interest of 4 per cent per annum.

On July 31, 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. Other lenders, including private ones such as HDFC Bank and Axis bank, have followed suit.

Earlier this month, Axis Bank had reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh.

Another PSU lender, Bank of Baroda had slashed the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too has tweaked the rate on savings bank accounts.