Mumbai: Kotak Mahindra Bank has lowered interest rates on savings deposits with balances above Rs 1 crore to 5.5% from 6% earlier. The bank has decided to continue offering 6% on savings accounts with balances of over Rs 1 lakh, despite a sharp reduction in interest rates in the system.
“Our focus continues to be on building a quality retail franchise. Hence, We are holding our savings interest rate in the retail segment. Effectively, 99.9% of our savings account customers continue to enjoy the same savings interest rate as before,” said Shanti Ekambaram, president (consumer banking), Kotak Mahindra Bank.
Customers with deposits up to Rs 1 lakh who were hitherto earning 5% on their balances will continue to enjoy the same return. The bank’s CEO Uday Kotak tweeted, “Borrowers matter so do savers, 6% continues for saving between Rs 1 lakh and Rs 1 crore”.tnn
Kotak’s decision to stick to its deposit rate comes in the wake of SBI reducing returns on its savings accounts to 3.5% from 4% earlier on Tuesday. On Wednesday, the RBI too reduced its key policy rates by 25 basis points (100 bps = 1 percentage point).
Other banks offering high returns on savings accounts are Yes Bank (6%), DBS Digibank (7%) and First Rand Bank as well as Airtel Payments Bank (both 7.25%). Kotak is the first among the banks with a high-return account that has committed to maintaining its rate.