Savings Account

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• Full service digital savings account with video KYC launched by YES Bank

  A full-service digital savings account with video KYC has been launched by YES Bank in order to expand its customer base and provide seamless services even in tier 1 and 2 cities. This will also ensure that physical distancing in the time of the Covid-19 pandemic is maintained. It will eliminate the requirement for any in-person interactions, visits to the bank’s branches, or physical documentation. The savings account comes with a virtual debit card which makes it easier to conduct online shopping, fund transfers, and other transactions through the mobile application called ‘'YES Mobile’' as well as on the website. There is free UPI, RTGS, and NEFT facilities. There are phone banking, net banking, and mobile banking facilities. There is biller registration and instant beneficiary facility. There are also reward points for the digital savings account and offers on the debit card. There is an interest rate of 6% p.a. offered by the bank. For corporate salary accounts, the average monthly balance is zero. For other individual savings accounts, the average monthly balance is Rs.10,000. The savings account requires e-KYC to be completed which can be done in a few simple steps on the bank’s website.

• HDFC Bank gets 2.5 lakh new customers during the lockdown

  HDFC Bank, during the lockdown, was able to add 2.5 lakh new customers in the last 40 days through the online facility which helps people open savings account instantly. The account is created using a limited KYC requirement provision. Once the account is opened, a customer will have one year to update all the details required.

  In April, the ‘Instant Account App’ was launched in the areas where lockdown was strictly imposed. Banks were classified as an ‘essential service’ but the strict lockdown prevented people from visiting banks. According to sources, all the 2.5 lakh accounts which were opened were new customers. The minimum average monthly balance requirement is Rs.10,000 for metro cities, Rs.5,000 for semi-urban cities and Rs.2,500 for rural cities.

  Most of the accounts which were opened were from the containment zones and red zones in various metro cities and urban areas. There was activity seen in the semi-urban and rural areas. The account is opened using the basic KYC details such as Aadhaar card number, valid PAN, OTP, etc.

  According to the RBI, people can opt for the Instant Account with limited KYC with a maximum balance of Rs.1 lakh.

• 1-year FD interest rate of SBI less than savings accounts of most banks

  The interest rates of Fixed Deposits (FDs) and loans have been cut by banks on a regular basis for more than a year. However, savings account interest rates have also been reduced after the Reserve Bank of India (RBI) cut the repo rate by 75 bps.

  State Bank of India (SBI), the country’s largest bank, cut its savings account interest rates by 26 bps to 2.75% per annum. ICICI Bank reduced its savings account interest rates by 25 bps as well. The interest rates for balances of up to Rs.50 lakh is 3.25% and above Rs.50 lakh is 3.75%, respectively. In April, Kotak Mahindra Bank reduced its interest rates twice. Apart from savings accounts, banks have reduced FD rates on a regular basis as well. The FD rates of SBI was reduced by 25-50 bps. The one-year fixed deposit in SBI is 5.70%. This is the first time the interest rates have been reduced to less than 6% since August 2004. The interest rate offered by SBI is less than the savings account interest rates of several banks. Some of the banks that offer a higher interest rate are IndusInd Bank, DBS Bank, Bandhan Bank, RBL Bank, and IDFC Bank. However, the interest rates are higher only under certain conditions.

• State Bank of India cuts interest rates on savings accounts

  State Bank of India has cut interest rates on savings accounts. It is now a rationalised interest rate across all savings accounts to 3%. This will be applicable for 44.51 crore account holders. The current interest rate for deposits of up to Rs.1 lakh is 3.25% while for deposits of above Rs.1 lakh it is 3%. This will now be a flat 3% across all deposits and all accounts. The bank has also waived the charges for maintaining an average monthly balance on all the 44.51 crore savings accounts. The current average monthly balance in rural, semi-urban, and metro areas is Rs.1,000, Rs.2,000, and Rs.3,000 respectively. The penalty for non-maintenance of the Average Monthly Balance used to range from Rs.5 to Rs.15 plus applicable taxes. SMS charges have also been waived. The bank also reduced the interest rates for fixed deposits across certain tenors. The interest on retail term deposits of less than Rs.2 crore has been reduced by 10 to 50 basis points across certain tenors.

• Yes Bank looking to reduce the savings account interest rate

  Following an infusion in capital and a change in management, Yes Bank is now looking to bring down the savings account interest rate to less than 6% and cut down deposits. According to the details available on the official website of Yes Bank, in case the account balance is Rs.1 lakh and above, the savings rate is 6%. According to a source, the decision in regards to the savings rate will be considered by the end of March. After the withdrawal cap of Rs.50,000 was removed on 18 March 2020, the bank is facing a challenge if customers want to withdraw more money. On 5 March 2020, the Reserve Bank of India (RBI) enforced a restriction on Yes Bank where its customers can withdraw only up to Rs.50,000. According to a tweet made by Yes Bank, the bank has extended its working hours by another hour for public convenience.

• SBI removes minimum balance requirement and cuts savings account interest rate

  State Bank of India (SBI), the country’s largest bank, has reduced the interest rate for all savings accounts to 3% and has also removed the minimum balance requirement.

  On 11 March 2020, the fixed deposit interest rates and MCLR were reduced by SBI across various tenures. The bank has over 44.51 crore savings bank accounts. The bank also said that it has waived the SMS charges to adopt the ‘Customers First’ approach. This will bring a huge relief to all its customers. According to a statement made by SBI, they have reduced the interest rate to 3% for all brackets. Currently, the interest rates for deposits up to Rs.1 lakh and above Rs.1 lakh are 3.5% and 3%, respectively. At the moment, SBI customers who live in the metro, semi-urban, and rural areas must maintain a minimum balance of Rs.3,000, Rs.2,000, and Rs.1,000, respectively. The bank used to levy a charge ranging between Rs.5 and Rs.15 plus taxes in case the minimum amount is not maintained. ICICI Bank said on its website that the interest rates for an account balance of less than Rs.50 lakh and more than Rs.50 lakh will be 3.5% and 4%, respectively. Many private lenders have a minimum required balance of Rs.10,000.

• Latest interest rates on bank savings accounts in small finance banks

  Each bank has a certain minimum balance that is required to maintain a savings account which may differ from bank to bank. If the minimum balance is not maintained, a penalty would have to be paid. The rate of interest also differs from bank to bank. Some of the latest interest rates from small finance banks in India are as follows: IDFC First Bank offers an interest rate of 6.00% p.a. for a balance of up to Rs.1 lakh. For balances above Rs.1 lakh, the interest rate offered is 7.00% p.a. Ujjivan Small Finance Bank offers an interest rate of 4.00% p.a. for balance of up to Rs.5 lakh, 5.50% p.a. for balance between Rs5 lakh to Rs.50 lakh, 6.75% p.a. for balance amounts that range from Rs.50 lakh to Rs.5 crore, and 7.00% for balance that exceeds Rs.5 crore. Utkarsh Small Finance Bank offers interest rates of 7.00% p.a. for balance up to Rs.25 lakh, 7.25% p.a. for incremental balance between Rs.25 lakh to Rs.10 crore, 7.75% p.a. for incremental balance that is above Rs.10 crore, and 7.00% for any balance up to Rs.25 lakh. Equitas Small Finance Bank offers interest rate of 4.50% p.a. for balance up to Rs.1 lakh, 6.00% p.a. for up to Rs.1 crore, 7.00% for balance between Rs.1 crore and Rs.5 crore, 7.25% for balance between Rs.5 crore and Rs.30 crore, and 7.50% for amount between Rs.30 crore and Rs.50 crore.

• Important Things to Know About SBI Net banking

  State Bank of India has issued important dos and don’ts for its customers to know about using its net-banking facilities. Some of these points are to make sure that your computer is free of malware. It is also important to change passwords frequently. Never reveal passwords to anyone. Card details should also not be revealed to anybody. It is important to also ignore any communication, whether by phone or email, that requires you to divulge your passwords. Before using SBI’s net banking, it is important to make sure of the following points: check that the SBI URL starts with ‘'https’'. The status bar or address bar should show the ‘'padlock’' symbol. You can click on this to view the security certificate. The address bar should turn green which shows that the website is secured and has the SSL Certificate which means the Extended Validation Standard. You should also be aware of phishing attacks, which is soliciting your personal confidential account information through emails, SMS, or phone calls. Any such phishing attempts should be reported to the email address: report.phishing@sbi.co.in. If such confidential information has been revealed accidentally, the next step is to lock your net banking user access immediately.

• Lowered key lending rates followed by the repo rate cut by RBI

  The Reserve Bank of India (RBI) has recently decreased the interest rates by 35 basis points (bps). Following this rate cut, a number of lenders have slashed their benchmark lending rates. The banks have been rather quick in passing on the benefits of the rate cuts to their customers. The cut in the rates basically means that the loan products are going to be cheaper.

  The latest rate cut which has announced by RBI is the fourth rate cut in this calendar year. Overall, the repo rate has been slashed by 110 basis points. The banks which have already cut down their benchmark lending rates are – State Bank of India (SBI), IDBI Bank, Bank of India (BOI), Bank of Maharashtra (BOM), Syndicate Bank, Allahabad Bank, Indian Overseas Bank (IOB), and Bank of Baroda.

• Credit card dues can be deducted from a savings account if not paid on time

  HDFC Bank can recover the credit card dues from the savings account a customer holds with the bank automatically, if the dues have been outstanding for a long period of time. According to the terms and conditions, the bank does not need to inform the customer about the deduction made from their savings bank account to pay the bill.

  According to the National Consumer Disputed Redressal Commission in New Delhi, the terms and conditions of HDFC Bank states that the bank can at any time without notice have lien and have the right to set off on all monies belonging to the card member and/or add-on card member standing to credit in any account/custody of the bank, if upon demand by the bank, the balance amount on the account is not repaid within the prescribed time.

• SBI customers required to maintain Rs.3,000 as AMB in their savings account

  Country’s largest lender State Bank of India (SBI) has recently reduced the rate of interest on its savings account (SA) to 3.25% for balances less than Rs.1 lakh effective 1 November 2019. Depending on the type of account, customers holding savings account with SBI are required to maintain a certain amount as an average monthly balance (AMB). Failure to maintain the AMB will attract penalty charges that will depend on the areas you are residing, whether it is metro, semi-urban, and rural areas. If you hold a savings account in SBI branches in metro and urban areas, you will be required to maintain Rs.3,000 as AMB. In semi-urban branches, the AMB requirement is Rs.2,000 while those in rural areas will need to maintain a minimum balance of Rs.1,000. If you fail to maintain the AMB in the metro and urban areas, you will be charged a penalty ranging between Rs.10 plus GST and Rs.15 plus GST. In semi-urban and rural branches, the penalty charges are Rs.7.5 plus GST to Rs.12 plus GST and Rs.5 plus GST to Rs.10 plus GST respectively.