Kotak Mahindra Bank has slashed its interest rates on savings accounts effective February 17, 2025 soon after the Reserve Bank of India (RBI) reduced its repo rate by 25 basis points.
Below are some important updates which all customers of the bank should know:
What are Kotak Mahindra Bank’s new savings account interest rates?
As elaborated on the Kotak Mahindra Bank website:
- Balances between Rs. 5 lakh and Rs. 50 lakh: From 3.5% to 3% per annum.
- Balances of Rs. 5 lakh or less: 3% per annum (no change).
- Balances above Rs. 50 lakh: From 4% to 3.5% per annum.
From which date are these new rates applicable?
The new interest rates are applicable from February 17, 2025.
Why did Kotak Mahindra Bank reduce the interest rates on its savings accounts?
The rate reduction follows RBI reducing the repo rate by 25 basis points (bps) from 6.50% to 6.25% in its MPC meeting on February 7, 2025.
Are these new rates applicable on all accounts?
Yes, the new interest rates are also applicable on Resident and Non-Resident (NRE/NRO) savings accounts.
How is interest on savings accounts calculated?
Kotak Mahindra Bank product wise calculates the interest and pays it quarterly on June 30, September 30, December 31, and March 31.
Is the interest rate on fixed deposits altered?
No, Kotak Mahindra Bank did not alter FD rates. New FD interest rates will vary from 2.75% to 7.40% for the general public and 3.25% to 7.90% for senior public as from June 14, 2024.
What impact will this rate change have on customers?
Customers having balance of Rs. 5 lakh to Rs. 50 lakh and above Rs. 50 lakh balance customers will have the interest income falling. This will impact their savings, particularly of those who rely on the interest as their daily earnings. The end result will be that these individuals will have lesser liquid cash in their hands due to lower interest rates.
Whereas, the customers with up to Rs. 5 lakh balances and less will not feel any difference in returns. Hence, customers need to consider how these changes and how the newly introduced rate cuts would affect their schemes, considering inflation and future RBI rate cuts. Further, for more details on the same Kotak Bank customers are advised to reach out to their respective branch and seek clarification if any.