Axis Bank Cuts Savings Account Interest Rates By 25 Basis Points; Check Details Here

For accounts holding Rs 2,000 crore and above, the interest rate will be linked to the overnight Mumbai Interbank Offered Rate (MIBOR) plus an additional 0.70 per cent

This rate cut applies to various accounts, including domestic, Non-Resident External, and Non-Resident Ordinary savings accounts

Source : PTI

Axis Bank has lowered its savings account interest rates by 25 basis points starting Tuesday, April 15, following a trend seen among several other lenders. This rate cut applies to various accounts, including domestic, Non-Resident External (NRE), and Non-Resident Ordinary (NRO) savings accounts.

The revised interest rates are structured in tiers based on account balances. Savings account holders with balances below Rs 50 lakh will now earn an annual interest rate of 2.75 per cent. For balances ranging from Rs 50 lakh to under Rs 2,000 crore, the interest rate has been set at 3.25 per cent per annum.

For accounts holding Rs 2,000 crore and above, the interest rate will be linked to the overnight Mumbai Interbank Offered Rate (MIBOR) plus an additional 0.70 per cent. These updated rates have been published on the bank’s official website.

Calculation Of Interest Rates

According to Axis Bank’s website, interest on savings accounts is calculated daily based on the closing balance. The bank uses the simple interest method for this calculation. The accrued interest is then credited to the account either quarterly or semi-annually, depending on the type of savings account and the bank’s policy.

The formula used to calculate daily interest on a savings account is: Daily Interest = Daily Balance × (Interest Rate / Days in the Year)

For example, if a savings account has a balance of Rs 4 lakh on a particular day and the annual interest rate is 3 per cent, the daily interest would be calculated as: Rs 4,00,000 × (3 / 100) / 365 = Rs 32.87

If this Rs 4 lakh balance is maintained consistently for 30 days, the total interest earned for the month would be: Rs 4,00,000 × 30 × (3 / 100) / 365 = Rs 98.61

Similarly, HDFC Bank has also reduced its savings account interest rates by 25 basis points. The bank now offers 2.75 per cent per annum on balances below Rs 50 lakh and 3.25 per cent per annum on balances above Rs 50 lakh. For ultra-high-value deposits, the interest is linked to the overnight Mumbai Interbank Offered Rate (MIBOR) plus 0.70 per cent.