has announced that it has hiked savings account interest rates with effect from August 6, 2022. “As the interest rates are linked to Repo rates, the interest rates will change as and when the Repo Rate gets revised by RBI on a T+1 basis. The rates as mentioned above will be calculated on the daily End of the Day balances maintained in Savings Bank accounts (Resident/NRE/ONR) and the same will be credited to respective accounts on a quarterly basis,” stated the Federal Bank website. The Reserve Bank of India (RBI), in its monetary policy review announcement on August 5, increased the repo rate by 50 bps.
Federal Bank latest savings account interest rates
Source: Bank website According to the above-mentioned formula, those with savings account balances below Rs 5 crore will now earn 3 percent interest rate, up from 2.5 percent before the hike.
RBI rate hike
The new rate hike cycle started on May 04, 2022, when the RBI increased the repo rate by 40 bps. This was the first hike in repo rate after almost a gap of 4 years. Before this the repo rate was hike on June 06, 2018. The May 2022 hike was soon followed up by another rate hike by the central bank during its June 8 monetary policy review where it increased the repo rate by 50 bps. As a result, within last 93 days, the central bank has increased the repo rate by a total 140 bps (50+90).