Savings account interest rates offered by banks vary based on the Fixed Deposit (FD) tenure and can change over time. Factors like market liquidity and policies from the Reserve Bank of India (RBI) influence these rates, so it’s wise to regularly check for the best offers.
Recently, Axis Bank, a private sector entity, lowered its savings account interest rate by 0.50% to 3.50% annually for balances up to Rs. 50 lakh. This followed a similar move by the State Bank of India (SBI), indicating a trend likely to spread across other banks.
On July 31, SBI, the largest bank in India, reduced their interest rates for most customers by introducing a two-tier system. For balances under Rs. 1 crore, the rate dropped from 4% to 3.5%, while balances over Rs. 1 crore still earn 4%. According to SBI, this change was driven by falling inflation rates and high real interest rates. Since around 90% of SBI’s savings accounts have balances under Rs. 1 crore, this impacts many customers.
Bank of Baroda also lowered its savings account interest rate to 3.5% for deposits up to Rs. 50 lakh. Other major banks in India like PNB and HDFC are also reducing their savings interest rates to 3.5%.
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