Federal Bank Too Cuts Interest On Savings Account By 25 Basis Points
Federal Bank has become the fourth private sector bank to cut interest rate on savings account since the Reserve Bank of India slashed repo rate.
The private sector bank has cut savings account rate by 25 basis points to 2.75%, with effect from Thursday, according to the bank's website. For deposits up to Rs 50 lakh, the interest rate will now be 2.75% per year.
Savings account balances between Rs 50 lakh and Rs 5 crore will fetch 3.50% interest annually and those between Rs 5 crore and 50 crore will attract 5.25% rate of interest.
For deposits that are lower than Rs 3 crore, the bank has also revised tenures by reducing them to 11, as against previous options of 15 tenures.
For a period between one year and 443 days, the revised rates are 7% from 7.50%.
So far, HDFC Bank, Axis Bank and ICICI Bank have cut interest rates on their savings accounts by 25 bps to 2.75%. Other banks are also likely to follow suit, analysts believe.
This has come as several banks are lowering their deposit rates for better policy rate transmission. So far, State Bank of India, Kotak Mahindra Bank, Bank of India, and YES Bank have cut deposit rates.
Last week, the Reserve Bank of India's Monetary Policy Committee cut the repo rate by 25 basis points to 6.00%.
The reason why most private sector banks are scrambling to cut interest rate on savings account is that they stand to benefit on the margin front.
Most private sector bank loans are linked to external benchmark lending rates, which helps during an interest rate easing cycle.
While depositors will earn less interest on their savings account, lowering deposit rates will help banks as it reduces their cost of funds and boost margins.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.