India Post Payments Bank has reduced interest rates on savings accounts by 25 basis points with effect from February 1, 2022. The revision will mean lesser earnings for savings account holders in India Post Payments Bank.

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“This is to inform all the concerned that India Post Payments Bank has revised its interest rate on all the customer variants of Savings Accounts as per the Asset Liability Committee approved policy effective from 1st February 2022,” the payments bank said in a notification.

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As per information available on the India Post Payments Bank website, balances up to Rs 1 lakh will earn an interest rate of 2.25 percent from February 1, 2022, down 25 basis points from 2.50 percent earlier. For balances between Rs 1-2 lakh, the India Post Payments Bank will pay an interest rate of 2.50 percent, compared to 2.75 percent per annum earlier.

The previous rates have been in effect since July 1, 2021. The bank gives interest payout on a quarterly basis to the account holders, computed on daily end-of-day balance.

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India Post Payments Bank is the payments bank division of India Post, which functions under the Department of Post in the Ministry of Communications. As per the rules of the government, a customer can hold a maximum balance of Rs 2 lakh at the end of the day in a payments bank. Earlier, the maximum balance limit per customer at the end of the day was Rs 1 lakh. Any amount beyond Rs 2 lakh can be swept into a linked post office savings account of the customer.

Apart from the savings account, the customer can also hold a digital savings account in the India Post Payments Bank.

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India Post Payments Bank crossed the five-crore customer mark earlier this month, becoming the third largest entity in the segment after Paytm and Airtel Payments Bank. Paytm Payments Bank has more than 6.4 crore customers and Airtel Payments Banks has more than six crore customers, PTI reported.

(Edited by : Shoma Bhattacharjee)