2 Private Banks Hike Savings Account Interest Rate: Benefits

The Indian central bank, RBI has raised its key lending rate - repo rate by 50bps in its latest MPC meeting and this is leaving eventual impacts on the bank savings account and FD rates.

Two leading private banks, namely, Kotak Mahindra Bank and Federal Bank.

Kotak Mahindra Bank

Kotak Mahindra Bank's hike in interest rate for the savings account came into effect on June 13, 2022.

For the savings account more than Rs. 50 lakh is going to attract 50bps or 0.5% higher interest rate to 4% per annum, according to an official statement by the bank. Earlier the same saving account used to attract a 3.5% interest rate per annum.

Deposit amount	Interest rate
Up to Rs. 50 lakh	3.5% per annum
Above Rs. 50 lakh	4.00% per annum

Kotak Mahindra Finance Ltd. was launched in 1985, and now it became one of the country's most trusted financial institutions. In Q4FY22, the bank has reported a Consolidated Total Income of Rs. 16794.19 Crore, increased by 18.47% from the last quarter. Its total income stood at Rs. 14176.16 Crore, increased by 3.82% from the same quarter in FY21. Kotak Mahindra Bank has also reported a net profit after tax of Rs. 3891.82 Crore in Q4FY22.

Federal Bank

On the other hand, Federal Bank has raised its interest rates on the savings account, which came into effect on June 9, 2022. According to an official statement by the bank, "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."

Deposit amount	Interest rate
Less than Rs. 5 crore	2.75% per annum
Above Rs. 5 crore (for amount up to and including Rs. 1Lakh)	2.75% per annum
Above Rs. 5 crore (for the remaining balance above Rs. 1Lakh)	4% per annum

Federal Bank is the preferred Personal, NRI, and Business banking partner for a growing expanse of customers across India, in both urban and rural areas. The Bank is driven by the quest to be one of the most admired banking institutions in the country. In Q4FY22, the net profit of the bank stood at Rs. 541 crore, grew by 13% YoY, while CASA grew by 15% YoY and CASA Ratio at an all-time high level of 36.94%. The bank's GNPA and NNPA brought down to 2.80% and 0.96% respectively. Its Agri-Business grew by 20% YoY. On the other hand, Federal Bank's Business Banking grew by 15% and Commercial Banking grew by 12% YoY.