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Federal Bank, a private sector lender, has announced an increase in interest rates on saving bank accounts. According to the bank’s official website, the new rates take effect on October 1st, 2022. Since Federal Bank’s savings account interest rates are calculated based on the repo rate, they have increased as well after the Reserve Bank of India (RBI) decided to hike the repo rate by 50 basis points at its Monetary Policy Committee.
Federal Bank has mentioned on its website that “As the interest rates are linked to Repo rates, the interest rates will change as and when the Repo Rate gets revised by RBI on a T+1 basis. The rates as mentioned above will be calculated on the daily End of the Day balances maintained in Savings Bank accounts (Resident/NRE/ONR) and the same will be credited to respective accounts on a quarterly basis.”
Federal Bank savings account interest rates
At the end of the day balance on savings accounts of Less than ₹5 Lakhs, the bank is now offering an interest rate of 2.90% below RBI’s Repo Rate and on savings account end of the day balance of ₹5 Lakhs to less than ₹50 Lakhs. Federal Bank is now offering an interest rate of 2.90% below RBI’s Repo Rate for amounts up to and including ₹1 Lakh and 2.85% below RBI’s Repo Rate for the remaining balance above ₹1Lakh.
Federal Bank is now offering an interest rate of 2.90% below RBI’s Repo Rate for amounts up to and including ₹1 Lakh and 2.80% below RBI’s Repo Rate for the remaining balance above ₹1Lakh on savings account end of the day balance of ₹50 Lakhs to Less than ₹5 Crores.
On savings account end of the day balance of ₹5 Crores to less than ₹25 Crores the bank will now offer an interest rate of 2.90% below RBI’s Repo Rate for amounts up to and including ₹1 Lakh and 1.50% below RBI’s Repo Rate for the remaining balance above ₹1Lakh. Whereas on savings account end of the day balance of ₹25 Crores and above, Federal Bank is now promising an interest rate of 2.90% below RBI’s Repo Rate for amounts up to and including ₹1 Lakh and 1.15% below RBI’s Repo Rate for the remaining balance above ₹1Lakh.
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Since most banks have begun raising loan interest rates and fixed deposit rates, the effects of the repo rate hike have already begun. While lenders like State Bank of India (SBI) and Bank of India raised lending rates after the Reserve Bank lifted the benchmark interest rate to control inflation, banks like Axis Bank, RBL Bank, DCB Bank, Bank of India, Karnataka Bank, and ICICI Bank announced interest rate increases on their fixed deposit products.
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