Big Blow to Depositors: Major Banks Slash Savings Account Interest Rates Effective April 21

Mumbai, April 21: In a move that will directly impact millions of account holders across the country, several leading private sector banks have announced significant cuts to savings account interest rates. The reductions, influenced by the Reserve Bank of India’s (RBI) recent repo rate cut, have taken effect from today, April 21, 2025.

YES Bank is the latest to revise its interest rate structure for savings accounts. The new rates, applicable from today, will affect returns across various deposit slabs:

• Up to ₹10 lakh: 3% per annum

• ₹10 lakh to ₹25 lakh: 3.5%

• ₹25 lakh to ₹50 lakh: 4%

• ₹50 lakh to ₹100 crore: 5%

• Above ₹100 crore: Rates on request

Customers with larger deposits will now have to contact the bank directly to know the applicable interest rates.

This move by YES Bank follows similar decisions by other banking giants like ICICI Bank, HDFC Bank, and Axis Bank, marking a trend of tightening returns for savers across the board.

ICICI Bank Update:
ICICI Bank had earlier reduced its savings account interest rate by 0.25%, bringing it down to 2.75% for balances up to ₹50 lakh. The rate for higher balances remains subject to the bank’s internal rate structure.

HDFC Bank Revision:
HDFC Bank slashed its savings account interest rate by 25 basis points. For deposits below ₹50 lakh, the rate is now 2.75%, while for balances above ₹50 lakh, it has been revised down to 3.25% from the previous 3.5%. These rates have been effective since April 12.

Impact on Consumers:
This coordinated reduction in interest rates across multiple private sector banks is expected to dent the earnings of small and medium depositors who rely on savings accounts for stable, low-risk returns. Experts suggest that savers may now look toward alternative investment options such as fixed deposits, mutual funds, or government-backed schemes for better yields.

With more banks likely to follow suit, financial advisors are urging customers to stay informed and reevaluate their savings and investment strategies.