New Delhi: Two leading lenders Punjab National Bank (PNB) and HDFC Bank on Thursday slashed interest rate on savings bank accounts by 50 basis points to 3.5% on deposits up to Rs50 lakh.

Besides, PNB has also reduced interest rates on fixed deposits of less than 1 crore by 15-40 basis points on select maturities. Interest rate on savings bank account for balance up to Rs50 lakh has been reduced to 3.50% 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 Rs50 lakh and above will continue to earn interest at 4% per annum. Customers maintaining account balance of below Rs50 lakh will earn interest at 3.5% per annum," HDFC Bank said in a statement.

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

On 31 July, State Bank of India (SBI) slashed interest rate on savings account deposits by 50 basis points to 3.5% on balance of Rs1 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% for deposits up to Rs50 lakh. Another PSU lender Bank of Baroda had cut the rate to 3.5% on deposits of up to Rs50 lakh. Karnataka Bank too has tweaked the interest rate on savings bank accounts.

On Wednesday, Yes Bank reduced the interest rate on savings bank accounts by 1% to 5% for deposits of less than Rs1 lakh.

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