A few days after interest rate on savings account deposits was slashed by State Bank of India and Bank of Baroda, private sector lender Axis Bank today reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh. However, the bank said that it will continue to pay 4 per cent interest on deposits of above Rs 50 lakh, said a PTI report. Axis Bank is the fourth lender to reduce the interest rate after market leader SBI begun the process of reducing interest rate on savings bank account on July 31. “… the bank has revised the interest rate downward on Savings Account balance by 50 bps to 3.50 per cent per annum on balance of up to Rs 50 lakh,” Axis Bank said in a regulatory filing. The new interest rates will be effective from today, it added.
It may be noted that on July 31, the country’s largest lender State Bank of India had slashed interest rate on savings account deposits by 50 basis points to 3.5% on balance of Rs 1 crore and below. However, SBI continues to offer 4% interest on savings account balance of Rs 1 crore and above. “The decline in the rate of inflation and high real interest rates are the primary considerations for warranting a revision in the rate of interest of savings bank deposits,” it had said.
Another PSU lender Bank of Baroda had cut the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too had tweaked the interest rate on savings bank accounts.