Core Viewpoint - IDFC First Bank has revised its savings account interest rates, introducing new slabs for small and medium balance categories, effective January 9, 2025, while maintaining competitive rates in the industry [1][3]. Summary by Category Interest Rate Changes - The savings rate for balances below ₹1 lakh is now set at 3% [4]. - A new slab has been introduced where the savings account rate for deposits above ₹1 lakh to below ₹10 lakh is pegged at 5%, and for balances above ₹10 lakh to ₹10 crore at 6.5% [5]. - Previously, the savings account rate for balances above ₹5 lakh to up to ₹5 crore was 7%, and for those above ₹5 crore to up to ₹10 crore was 6.75% [5]. Comparison with Other Banks - Other mid-sized private sector lenders like IndusInd Bank, Federal Bank, and Yes Bank offer interest rates of 2.50% for savings account balances below ₹1 lakh, while Bandhan Bank offers 2.70% [7]. - RBL Bank provides a 3% savings account rate for deposits below ₹5 lakh [7]. - For balances above ₹1 lakh to up to ₹1 crore, rates among these lenders range between 2.75% and 5.35% [8]. Impact on Financial Metrics - The reduction in savings account rates is anticipated to enhance the net interest margin (NIM) of IDFC First Bank, which reported a 59 basis point drop in NIM to 5.59% in Q2 FY26 compared to the previous year [6].

Core Viewpoint - The Reserve Bank of India (RBI) expects deposit rates to moderate in line with bank lending rates following a cumulative 125 basis points cut in the policy repo rate since February 2025, which has resulted in a decline in the weighted average domestic term deposit rate (WADTDR) [5][4]. Group 1: Deposit Rates and Monetary Policy - RBI Governor Sanjay Malhotra indicated that deposit rates should reflect real interest rates, which remain high despite nominal rates appearing low due to low inflation [5][4]. - The WADTDR on fresh rupee term deposits decreased to 5.57% in October 2025 from 5.61% in September 2025, marking a 105 basis point decline [5][4]. - The decline in deposit rates has been broad-based, with the WADTDR on fresh deposits down by 105 basis points and outstanding deposits softening by 32 basis points over the same period [4][5]. Group 2: Bankers' Perspectives - Bankers have noted that deposit rates have already moderated, suggesting limited scope for further reductions [5]. - Ashwini Kumar Tewari, managing director at State Bank of India, emphasized the importance of considering depositor interests while indicating that the asset-liability committee will decide on any further rate changes [5].