The interest rate on repo-linked savings bank deposits has been revised by UCO Bank, a public sector lender. The new interest rate will take effect from April 10, 2022, and the bank will give a 2.6 percent (linked to repo) interest rate on savings bank deposit balances up to Rs 10 lakhs, while the bank will now pay a 2.75 percent (Not Linked with Repo) interest rate on savings bank deposit balances over Rs 10 lakhs.
During a fund crisis, banks borrow money from the Reserve Bank of India (RBI) at a fixed interest rate known as the repo rate. The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) declared on April 8 that the repo rate will remain at 4%, implying that interest rates on deposits may not be lowered further. However, because the correlation between the repo rate paid by the bank to RBI and the interest rates payable by the borrower to the bank is directly proportional, any change in the repo rate would also affect the interest rate on your savings and investment products.
On deposits up to Rs 10 lakhs, UCO Bank currently offers a repo-linked interest rate of 2.6 percent per annum. Savings interest rates for such accounts will automatically raise in response to changes in the RBI's repo rate, and vice versa.
UCO Bank Savings Account Interest Rates
|Balance||Rate of Interest ( p.a)|
|Upto Rs 10 Lakhs||*2.60% (Linked with Repo)|
|Over Rs 10 Lakhs||2.75% (Not Linked with Repo)|
|Source: Bank Website (w.e.f 10.04.2022)|