The interest rate on savings accounts has been modified by Union Bank of India, the top government bank in the nation. This information is helpful to you if Union Bank is also where you have your bank account. The savings account is currently offering a maximum return of 4% following the bank’s modifications. The Union Bank of India’s official website states that as of November 20, 2023, the new interest rates on savings accounts are in effect.
In what circumstances is 4% interest due?
For savings account balances up to Rs 50 lakh, the bank is offering 2.75% interest, and for balances between Rs 50 lakh and Rs 100 crore, it is offering 2.90% interest. In a similar vein, Union Bank is offering 3.10% interest on savings between Rs 100 crore and Rs 500 crore. The bank offers 3.40% interest on balances between Rs 500 crore and Rs 1000 crore. Interest rates of 4.00% are offered by the bank on savings exceeding Rs 1000 crore.
The massive increase in net profit
According to Union Bank, net profit climbed by 90% annually to Rs 3,511.4 crore in the second quarter of the financial year, which ended on September 30, 2023 in the financial year. Union Bank had made a profit of Rs 1,848 crore during the same period the previous year. It was Rs 8,305 crore as compared to the same quarter in FY23. In Q2 of FY24, net interest income rose by 10% to Rs 9,126.1 crore.
Indian Overseas Bank (IOB)
raised the interest rate on savings accounts (FDs) worth less than Rs 2 crore recently. The interest rate on FDs has been raised by IOB by 30 basis points from one year to two years. However, the bank has also lowered the 444-day interest rate. In an attempt to lower inflation, the RBI raised the repo rate by 2.5 percent starting in May 2022 and did so over the course of nearly a year. Banks were forced to raise the cost of all loan products, including personal, auto, and house loans, following the increase in the repo rate. Bank interest rate increases cause the market’s liquidity and demand to decline. This contributes to inflation control. Banks raise interest rates on savings accounts, FDs, and other savings plans as a result.
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