 "HDFC Bank, ICICI Bank, Federal slash savings rates: New terms explained")
State Bank of India, HDFC Bank, ICICI Bank and other lenders slashed interest rates on savings accounts after a 50 basis point (0.5 per cent) repo rate cut by the Reserve Bank of India (RBI).
Some major banks have shifted to a flat-rate structure, irrespective of the account balance. Here are there new terms.
State Bank of India (SBI)
New rate: 2.5 per cent per annum for all balances (Effective from June 15)
Earlier rates: 2.7 per cent (below Rs 10 crore), 3 per cent (Rs 10 crore and above)
HDFC Bank
New rate: 2.75 per cent per annum across all balances (From June 10)
Earlier rates: 2.75 per cent (below Rs 50 lakh), 3.25 per cent (Rs 50 lakh and above)
ICICI Bank
New rate: 2.75 per cent per annum across all balances (From June 12)
Earlier rates: 2.75 per cent (below Rs 50 lakh), 3.25 per cent (Rs 50 lakh and above)
Revised slab-based rates at other banks
Some banks continue to offer tiered interest rates based on account balance:
Bank of Baroda
Revised rates: Between 2.7 per cent and 4.25 per cent per annum (From June 12)
Federal Bank
Revised Rates: Between 2.5 per cent and 6.25 per cent per annum (From June 17)
IndusInd Bank
Revised rates: Between 3 per cent and 5 per cent per annum (From June 16)
RBL Bank
Revised rates: Between 3 per cent and 6.75 per cent per annum (From June 16)
Impact on bank customers
Lower returns: Uniform rates at major banks mean reduced earnings on high-balance accounts.
Opportunity in smaller banks: RBL and Federal Bank offer relatively higher returns, especially for higher balances.
Need to reassess: Customers may consider shifting to banks offering better interest or explore alternative investment options like fixed deposits, liquid funds, or recurring deposits.