HDFC Bank Cuts Fixed Deposit, Savings Account Interest Rates Second Time

HDFC Bank Ltd. has lowered the interest rate offered on fixed deposits and savings account by 25 basis points. This is the second time the lender has cut rates in June.

The fixed deposit interest rate offered for deposits less than Rs 3 crore, applicable since June 25, stands at 5.75% for a one-year period, as per the lender's website. The rate is set at 6.25% for senior citizens.

The savings account interest has also been revised to 2.50%, according to the bank's website.

Looking at interest for a three-year period, the rate is 6.45% and 6.95% for senior citizens. The interest rate offered for a five year period is 6.40% and 6.90% for senior citizen. These new rates have been effective from June 24, according to the bank's website.

India's largest private sector lender had lowered the interest rates offered on June 10.

The bank had also earlier this month reduced the marginal cost of lending rate by 10 basis points across tenures. Borrowers with MCLR-linked loans, which are typically home loans, are likely to see a fall in their EMIs or a shorter loan tenure, depending on their loan terms and reset periods.

This had followed the Reserve Bank of India's 50 basis points rate cut announcement, making major front-line banks cut their lending rates for faster policy transmission.

The repo rate is the interest rate at which the RBI lends to commercial banks. With borrowing now turned cheaper, banks have also reduced interest rates for customers. When borrowing is expensive, banks offer higher fixed deposit rates to attract more funds.