Bank of Baroda cuts interest on savings a/c

Within days of SBI slashing interest rate on savings bank account, another PSU bank -- Bank of Baroda -- has followed suit, cutting it to 3.5% on deposits of up to Rs 50 lakh.

“We wish to inform you that it has been decided to introduce a two-tier savings bank interest rate (from) August 5...,” the bank said in a regulatory filing.

Effective Saturday, the interest rate on savings bank balance of up to Rs 50 lakh has been reduced to 3.5% from the current annual 4%.

However, for balance above of Rs 50 lakh, the bank has retained the rate at 4%. On July 31, the country’s largest lender State Bank of India had slashed interest rate on savings account deposits by 50 basis points to 3.5% on balance of Rs 1 crore and below.

However, SBI continues to offer 4% interest on savings account balance of Rs 1 crore and above. More banks are likely to follow suit.