Private sector lender Yes Bank reduced the interest rate on savings bank accounts by 1 per cent to 5 per cent for deposits of less than Rs 1 lakh. However, the bank will continue to pay 6 per cent interest on deposits of over Rs 1 lakh and less than Rs 1 crore.
The bank has also slashed interest rate on savings accounts to 6.25 per cent from existing 6.5 per cent for deposits over Rs 1 crore. The new rates would be effective from September 1, Yes Bank said in a statement.
Yes, Bank is the fifth lender to reduce saving account interest rate after market leader State Bank of India (SBI) begun the process of reducing the interest rate.
On July 31, SBI slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below. Another PSU lender Bank of Baroda had cut the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too lowered interest rate on savings bank accounts.