Savings account interest rate after RBI’s repo rate cut: Quick comparison of latest interest rate on HDFC, SBI, ICICI, PNB savings account
Will the rate cut impact savings account interest rates?
When the RBI lowers the repo rate, it becomes cheaper for banks to borrow funds. As a result, banks may lower the interest rates on savings accounts in order to maintain their profit margins. On the other hand, when the Reserve Bank raises the repo rate, banks may raise interest rates on savings accounts to attract more deposits, as per AU Small Finance Bank website.
Last window for FD investors to book FDs at higher rate has officially started as RBI cuts repo rate after a 5 years gap
Following the RBI's reduction of the repo rate, there are expectations that banks might lower interest rates on savings accounts. In fact, RBL Bank has already reduced the interest rate it gives on small balances by 25 basis points (bps).
The interest rate on savings accounts is calculated based on the account holder’s daily closing balance. The interest is credited to the account holder’s account on a monthly or quarterly basis, depending on the bank’s discretion.
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