Kotak Mahindra Bank Cuts Savings Account Interest Rate For The 2nd Time In April

For the second time in April, Kotak Mahindra Bank has slashed its interest rates on savings deposits, pushing it closer to the rates offered by public sector banks.

The new rates will be effective from 20 April and comes a week after the private lender reported a healthy jump in its deposit base for the March quarter.

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In an email to its savings bank account holders on Sunday, Puneet Kapoor, the bank's president for products, alternate channels and customer experience delivery said, "effective April 20, the interest rates on daily balances in savings account stands revised to 4.5 per cent per annum for daily balances above Rs 1 lakh and 3.75 per cent for daily balances up to Rs 1 lakh."

The rates are a full one percent higher than what the State Bank of India (SBI) offers, however, these rates are much lower than the 6 percent interest that the private bank paid to customers in 2019 when it was among the few full-fledged retail banks in India that gave higher returns on savings deposits and variable interest based on daily balances.

On the other hand, SBI offers a flat rate to all its depositors irrespective of the daily balance. The largest public sector bank also recently slashed its interest rates on savings accounts to 2.75 percent after RBI's repo rate cut but also removed the minimum balance requirement for accounts to help customers amid the coronavirus pandemic.

According to a PTI report, Kotak Mahindra Bank decided to cut the interest rates to help better manage the cost of funds and pass on the benefit to borrowers.