After RBI's recent rate cut of 25 basis point, apart from the commercial bank, new age Paytm Payments bank has also reduced interest rate on its savings account offering by 50 basis points to 3.5% from the earlier 4%. The new rates will become applicable from November 9, 2019.
At the same time, the bank will launch a new on-demand FD scheme in early November that will enable customers to channelize their savings to a FD scheme with the Payment Bank's partner bank. This FD account can be opened for any amount and investors can earn a higher interest rate of up to 7.5%.
Speaking on the development Satish Kumar Gupta, MD & CEO of Paytm Payments Bank said, "RBI has recently cut the repo rate by 25 basis points to 5.15%, which takes its cumulative cuts so far in the last 12 months to 135 basis points, which has prompted this move."
Features of Paytm Payments Bank FD scheme
The FD amount can be redeemed partially or in full at any time without any charges.
FD scheme can be opened with the Payments Bank for as low as Rs. 1 and earn a higher interest of up to 7.5%.
"PPB has a highly secure infrastructure and allows transactions and deposits of any size during the day, in its savings accounts. At the end of the day, any amount exceeding the limit of Rs 1 lakh across savings account and/or wallet, is automatically converted into a fixed deposit via auto sweep with PPB's partner bank, allowing customers to earn up to 7.5 per cent per annum interest (as of 10th October 2019) on their fixed deposit amount," Paytm said in an official statement.
"PPB has been growing rapidly and led the rankings in the number of digital transactions, as per the July report by the Ministry of Electronics and Information Technology (MeiTY). As of April 2019, the bank had more than Rs 500 crore deposits in savings accounts, which makes it the largest payments bank in India in terms of deposits and is aiming to introduce more products and features to increase the monthly processing of savings account payments from Rs 24,000 crore to Rs 40,000 crore in FY 2019-20," the statement by Paytm added.