PNB, HDFC Bank cut interest rate on savings account by 0.5%

New Delhi: Two leading lenders PNB, HDFC Bank on Thursday slashed interest rate on savings bank accounts by 50 basis points to 3.5 percent on deposits up to Rs 50 lakh.

Besides, Punjab National Bank (PNB) has also reduced interest rates on fixed deposits of less than Rs 1 crore by 15-40 basis points on select maturities.

Interest rate on savings bank account for balance up to Rs 50 lakh has been reduced to 3.50 per cent per annum, PNB said in a statement.

HDFC Bank became the fifth while PNB sixth lender after SBI to cut interest rate on savings bank account.

"Post revision, customers maintaining savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4 per cent per annum. Customers maintaining account balance of below Rs 50 lakh will earn interest at 3.5 percent per annum," HDFC Bank said in a statement.

The new interest rates of both the banks will be effective from August 19, it added.

On July 31, State Bank of India (SBI) slashed interest rate on savings account deposits by 50 basis points to 3.5 percent on balance of Rs 1 crore and below.

This triggered rate cut by various banks. Earlier this month, Axis Bank had also reduced interest rate on savings bank accounts by 50 basis points to 3.5 percent for deposits up to Rs 50 lakh.

Another PSU lender Bank of Baroda had cut the rate to 3.5 percent on deposits of up to Rs 50 lakh. Karnataka Bank too has tweaked the interest rate on savings bank accounts.

Yesterday, Yes Bank reduced the interest rate on savings bank accounts by 1 per cent to 5 percent for deposits of less than Rs 1 lakh.