Where are yum downloaded packages saved in linux?

The packages will be saved in /var/cache/yum/<repo-name>/packages/

You have to edit the /etc/yum.conf
from : keepcache=0 to : keepcache=1

keepcache=0  { Remove packages after successful instillation }

keepcache=1  { Keep packages after successful instillation }

[root@sip3 base]# cat /etc/yum.conf
[main]
cachedir=/var/cache/yum
keepcache=1
debuglevel=2
logfile=/var/log/yum.log
distroverpkg=redhat-release
tolerant=1
exactarch=1
obsoletes=1
gpgcheck=1
plugins=1
bugtracker_url=http://bugs.centos.org/yum5bug

# Note: yum-RHN-plugin doesn't honor this.
metadata_expire=1h

installonly_limit = 5

# PUT YOUR REPOS HERE OR IN separate files named file.repo
# in /etc/yum.repos.d
[rootsip3 base]#