HDFC Bank, Punjab National Bank (PNB) and YES Bank have taken a cue from the recent move by State Bank of India (SBI) and a couple of other lenders to lower their savings bank deposit rates.
HDFC Bank and PNB said customers maintaining an SB account balance of below ₹50 lakh will henceforth earn 3.5 per cent interest against 4 per cent earlier.
The new rate, which is applicable to both resident and non-resident customers, is effective from August 19 for both banks.
However, customers maintaining an SB account balance of ₹50 lakh and above will continue to earn 4 per cent.
YES Bank has slashed its SB rate on deposits below ₹1 lakh to 5 per cent from 6 per cent. On deposits in the ₹1 crore and above slab, the rate has been pared to 6.25 per cent from 6.50 per cent. The new SB rates for resident and non-resident customers will be effective September 1.
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,.
Since July 31, three banks have cut their SB rates. With effect from July 31, India’s largest bank SBI has been offering 3.5 per cent on SB deposits below ₹1 crore against 4 per cent earlier. The SB rate on deposits above ₹1 crore continues to be 4 per cent.
SBI said the decline in inflation and high real interest rates justified a cut in the deposit rate.
Huge savingsBanks could make huge savings because of the cut in the SB rate. For example, on a savings bank deposit base of ₹9,45,040 crore (of which 90 per cent is in the below ₹1 crore category), SBI could save about ₹4,250 crore from the 50 basis points cut.
Bank of Baroda and Axis Bank lowered their SB rate to 3.50 per cent from 4 per cent on deposits of up to ₹50 lakh. SB deposits above ₹50 lakh will continue to fetch a 4 per cent return.
Uday Kotak, Executive Vice-Chairman and MD, Kotak Mahindra Bank, had announced that his bank would keep its SB rate steady at 5-6 per cent. The bank offers 5 per cent interest on SB deposits up to ₹1 lakh, 6 per cent on deposits above ₹1 lakh and up to ₹5 crore, and 5.5 per cent on deposits above ₹5 crore.