Federal Bank hikes interest rates by 25 bps on savings accounts: Details inside
2 min read . Updated: 10 Feb 2023, 02:33 PM IST
Premium- Federal Bank, a private sector lender, raised its interest rates on savings accounts. According to the bank's official website, the new rates take effect on February 9, 2023.
Federal Bank, a private sector lender, raised its interest rates on savings accounts. According to the bank's official website, the new rates take effect on February 9, 2023. This announcement was issued by Federal Bank in accordance with the RBI's 25 bps repo rate rise to 6.5%. Since the interest rates on Federal Bank's savings accounts are linked to repo rates, they will vary as and when the repo rate is adjusted by the RBI on a T+1 basis. As a result, Federal Bank increased the interest rates on its savings accounts by 25 basis points for its customers.
Federal Bank Savings Account Interest Rates
On savings accounts with end of a day balance of less than ₹5 lakhs, the bank is offering an interest rate of 3.45% below RBI's Repo Rate and on savings accounts with end of the day balance of ₹5 lakhs to less than ₹50 lakhs, Federal Bank is now offering an interest rate of 3.45% below RBI’s Repo Rate for balance below ₹5 lakhs and 3.40% below RBI's Repo Rate for a balance of ₹5 lakhs and above.
The bank is now offering an interest rate of 3.45% below the RBI's repo rate for balances below ₹5 lakh, 3.40% below the RBI's repo rate for balances of ₹5 lakh to less than ₹50 lakh, and 2.75% below the RBI's repo rate for balances of ₹50 lakh and above on savings accounts with end-of-day balances of ₹50 lakh to less than ₹2 crore.
Customers of Federal Bank will now receive interest rates that are 3.45% below the RBI repo rate for balances under ₹5 lakh, 3.40% below the RBI repo rate for balances between ₹5 lakh and ₹50 lakh, 2.75% below the RBI repo rate for balances between ₹50 lakh and ₹2 crore, and 2.50% below the RBI repo rate for balances of ₹2 crore and above on savings accounts with end-of-day balances between ₹2 crore and ₹5 crore.
Now, Federal Bank is promising an interest rate on savings accounts with end-of-day balances between ₹5 crores and less than ₹50 crores that is 3.45% below the RBI's repo rate for balances up to and including ₹1 lakh and 1.00% below the RBI's repo rate for the remaining balance above ₹1 lakh. Customers of Federal Bank will now get interest rates of 3.45% below the repo rate of the RBI for balances up to and including ₹1 lakh, and 0.50% below the repo rate of the RBI for the remaining value over ₹1 lakh, on savings accounts end-of-day balances of ₹50 crore and above.
The Federal Bank's above-mentioned savings account rates are based on the daily end of the day balances held in savings bank accounts (Resident/NRE/ONR), and they are credited to the designated accounts on a quarterly basis.
Since May of this year, the RBI has raised the repo rate by a total of 250 basis points, bringing it to 6.50 percent on Wednesday. Banks adjust their lending and deposit rates in response to the announcement whenever the RBI raises its repo rate to control inflation because doing so frequently affects the borrowing cost for banks. They pass this burden onto their customers by boosting the interest rates on their fixed deposits and loans which results in rising EMIs, since the lenders will now have to pay more in terms of interest against the money they borrow from RBI.