Private lender ICICI Bank has reduced interest rate on fixed deposits and savings account by up to 50 basis points (bps). The reduction in interest rates on savings accounts will be effective from April 9, while new rates on FDs will apply from April 3, 2020.

In a filing to the stock exchanges, the lender said it has cut interest rates on its fixed deposits (FDs) by up to 50 bps (1 bps = 0.01%) across various tenures. Now one-year FD will fetch an interest rate of 5.8% per annum, compared to 6.2% earlier, down 40 bps. While interest rate on two-year FDs has been reduced by 50 bps to 5.8%, five-year FDs by 40 bps to 6%.

These revised interest rates will be applicable for new deposits and renewal of existing term deposits, the bank said.

Besides, ICICI Bank has cut savings bank account interest rate by 25 bps with effect from April 9, 2020. For savings account balance below Rs 50 lakh, the interest rate will come down to 3.25% per annum from 3.5% per annum, and amount above Rs 50 lakh will earn 3.75% per cent.

The move came after the Reserve Bank of India (RBI) announced 75 bps cut in the repo rate on March 27. On the same day, State Bank of India, the country's largest lender, had cut its FD rates by up to 50 bps across various tenures.

Savings bank account interest is calculated on a daily basis on the daily closing balance in the account, at the rate specified by the bank in accordance with Reserve Bank of India directives.

Earlier on Tuesday, the government had announced reduction in interest rates on small savings schemes like the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, post office term deposit and others, between 70 bps and 140 bps for the April-June period, with effect from April 1, 2020.