According to a press release, the interest rate has been revised to 5 per cent a year for daily balances of above Rs 1 crore from the existing 4 per cent, whereas for daily balances of Rs 50 lakh to Rs 1 crore, the applicable interest rate is 4 per cent a year.
Similarly, for daily balance in the range of Rs 1 lakh to Rs 50 lakh, the interest rate has been reduced to 3.5 per cent from the existing 4 per cent and for balance less than Rs. 1 lakh, the rate has been revised to 3 per cent from 4 per cent.
Mahabaleshwara MS, MD and CEO, Karnataka Bank Ltd, said: “SB product is not price sensitive and is generally driven by product offerings, convenience and customer service standards. Hence, the interest rate revision impact on customers with lower balance is negligible. However, SB accounts with higher balance will attract higher interest in the new structure, and may induce customers to park more money in their SB accounts, thus promoting savings habit among the general public.”
The rates would become effective on Thursday, the press release said. The revised rates are applicable to resident Indians as also to SB-NRO and NRE account holders.