BackYes Bank increases balance slab for 7% interest rates on savings accounts
Savings account deposits of over `3 lakh will earn a 7% annual interest from 1 April against deposits with above `1 lakh currently
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Mumbai: Yes Bank Ltd, India’s fourth-largest private sector bank by assets, on Friday said it will no longer pay 7% annual interest on savings account deposits of above ₹ 1 lakh.
The bank said only savings account deposits of over ₹ 3 lakh will earn a 7% interest while deposits below ₹ 3 lakh will earn 6% interest every year.
The changes in rates by Yes Bank are the first time since October 2011 when it had increased its savings bank rate after the Reserve Bank of India (RBI) allowed banks to offer differential interest rates.
“We have changed the slab of rates noting the downward trajectory of interest rates," a bank official said on the condition of anonymity.
RBI has already reduced its benchmark repo rate by 50 basis points in 2015 as inflation has eased. The lower rates have also had an impact on bank borrowing costs. Banks are now paying 8.47% on one year certificate of deposits (CDs) down from a peak of 9.97% they were paying in March 2014. One basis point is one-hundredth of a percentage point.
Yes Bank’s new rates will be applicable from 1 April, the bank said.
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