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Central Bank of India and Dena Bank on Monday reduced interest rates on savings accounts. While both banks reduced the rate by 50 basis points (bps) to 3.5 per cent per annum, the cuts apply to different buckets. At Central Bank, the cut will apply to savings accounts with balances of up to Rs 50 lakh. Accounts with higher balances will continue to earn 4 per cent. Dena Bank has reduced the rate on accounts with balances of up to Rs 25 lakh. For balances of above Rs 25 lakh, the rate remains unchanged at 4 per cent.
Most major banks recently dropped savings rates to 3.5 per cent, following SBI’s decision to do so for savings accounts with balances of up to Rs 1 crore.
HDFC Bank, Bank of Baroda, PNB, Axis Bank, Yes Bank and Karnataka Bank are among the lenders who have announced a cut in their rates. The last two lenders to drop rates were ICICI Bank and Union Bank. ICICI now pays 3.5 per cent on deposits up to Rs 50 lakh and 4 per cent on savings accounts with higher balances. Union Bank pays 3.5 per cent on savings accounts with balances of up to Rs 25 lakh.
Meanwhile, a PTI report has said that Bank of India is considering reducing the Savings Bank account rate and also the interest rate on deposits. “A cut on both the SB rate and interest on deposits are on the cards. Savings Bank account rate cut may not happen immediately but it is under consideration,” BOI executive director R S Sankaranarayana said.