The deposit interest rates offered for amounts greater than 1CR are different from normal deposit interest advertised on bank’s website. What is the reason for this? Is there any regulatory reason?
because that would be a substantial loss of capital for them, after all bank is a business not a charity. In anycase, you shouldn’t keep that much cash as liquid, always cap your savings below 1cr and deposit the rest as fd or bonds or whatever.
there are no regulatory reasons. Many times FD of more than or equal to 1 cr is illiquid meaning that it cannot be prematurely withdrawn before the tenure completes. Since, 1 cr is a big amount and the depositor cannot withdraw prematurely, they need to attract the depositor somehow. Hence, higher interest rate. Also, in case of premature withdrawal, the bank incurs expenses. They pass on that benefit to the depositor in terms of higher interest rate.
money in savings can be withdrawn anytime,
money in f.d sit for longtime which bank use o give others loan