Banks reduce savings account interest rates to protect profitability

In a move to protect profitability in a downward interest rate scenario, private sector banks have started to reduce savings account interest rates. While some of the banks have discontinued special fixed deposit schemes, an across the board decline of term deposit rates is yet to be seen. 

Recently, HDFC Bank, ICICI Bank, Axis Bank and Federal Bank announced nearly 25 basis points revision in their savings account interest rates. Yes Bank has also announced new rates for different slabs from today.  Public sector banks are yet to take a call on savings account rates. State Bank of India (SBI), country’s largest lender, has been offering 2.7 per cent on balances under ₹10 crore since October 2022.