The interest rate on savings bank deposits linked to the repo has been revised by UCO Bank, a public sector lender. The new interest rate will come into effect on April 10, 2022 and the bank will grant an interest rate of 2.6% (linked to the repo) on savings bank deposit balances up to Rs 10 lakhs, while that the bank will now pay 2.75% (not linked to Repo) interest rate on savings bank deposit balances above Rs 10 lakhs.
During a financial crisis, banks borrow money from the Reserve Bank of India (RBI) at a fixed rate of interest known as the repo rate. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) said on April 8 that the repo rate would remain at 4%, implying that interest rates on deposits could no longer be lowered. However, as the correlation between the repo rate paid by the bank to RBI and the interest rates payable by the borrower to the bank is directly proportional, any change in the repo rate would also affect the interest rate of your investment products. savings and investment.
On deposits up to Rs 10 lakhs, UCO Bank is currently offering a repo-linked interest rate of 2.6% per annum. Savings interest rates for these accounts will automatically increase in response to changes in the RBI repo rate, and vice versa.
UCO Bank Savings Account Interest Rates
|Balance||Interest rate (pa)|
|Up to Rs 10 Lakhs||*2.60% (linked to deposit)|
|Over Rs 10 Lakhs||2.75% (not linked to repo)|
|Source: Bank website (wef 10.04.2022)|
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Article first published: Saturday, April 9, 2022, 12:25 p.m. [IST]