Following on the footsteps of other banks that recently reduced interest rates on savings account, HDFC Bank has also announced cuts in interest rates on savings account. Earlier, HDFC Bank was offering 4 percent interest rate on savings account for deposits up to Rs 50 lakh. This has now been reduced to 3.5 percent, which is in line with the recent reductions introduced by other banks. However, for deposits above Rs 50 lakh, HDFC will continue to pay interest rate at 4 percent. An excerpt from the regulatory filing submitted by HDFC Bank read, “Post revision, customers maintaining savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4 per cent per annum. Customers maintaining account balance of below Rs 50 lakh will earn interest at 3.5 per cent per annum.”
The new rates will be applicable for both resident and non-resident customers. The new rates will come into effect from August 19, 2017. It may be recalled that the reduction in interest rate on savings account was first announced by the State Bank of India (SBI) on July 31. Following on the footsteps of SBI, many other banks have also reduced interest rates on savings accounts. These banks include Bank of Baroda, Axis Bank, Indian Bank, Karnataka Bank, and Yes Bank. HDFC Bank is the latest to cut the interest rate on savings accounts. Other banks are also expected to follow the trend in the coming days.