1. HDFC Bank’s fixed deposit rates now less than those of SBI

HDFC Bank’s fixed deposit rates now less than those of SBI

HDFC Bank has reduced interest rates on term deposits below Rs 5 crore with maturities of two years and higher by 25 basis points (bps) to 6%.

By: | New Delhi | Updated: January 13, 2017 7:00 AM
Last week, HDFC Bank had slashed rates on deposits of more than Rs 5 crore with maturities of one year and more by 125 bps to 5%. (Reuters) Last week, HDFC Bank had slashed rates on deposits of more than Rs 5 crore with maturities of one year and more by 125 bps to 5%. (Reuters)

HDFC Bank has reduced interest rates on term deposits below Rs 5 crore with maturities of two years and higher by 25 basis points (bps) to 6%.

This is lower than rates paid by the country’s largest lender, State Bank of India (SBI), on deposits of less than Rs 1 crore with comparable maturities. SBI’s interest rates on two-year and three-year retail deposits stand at 6.85% and 6.7%, respectively, while larger deposits with the same maturities earn 4.25%.

ICICI Bank, IDBI Bank and Kotak Mahindra Bank were the other banks which reduced their bulk deposit rates this week.

ICICI reduced the rate on deposits of between Rs 1 crore and Rs 25 crore with maturities between one and two years to 6.10% from 6.25%.

IDBI Bank brought down rates on deposits of more than Rs 1 crore to 6.1% from 6.5% for one-year deposits, to 6.15% from 6.25% for two-year deposits, and to 6.25% from 6.50% for three-year deposits.

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Kotak Mahindra now pays 6.25% on one-year deposits of between Rs 1 crore and Rs 10 crore, against 6.35% earlier.

Last week, HDFC Bank had slashed rates on deposits of more than Rs 5 crore with maturities of one year and more by 125 bps to 5%. With that cut, the differential between the bank’s bulk deposit rate on one-year money and that of SBI had narrowed to 75 bps from 200 bps.

Amid a surge in deposits resulting from withdrawal of Rs 500 and Rs 1,000 currency notes, a number of banks reduced rates on term deposits.

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According to the RBI, banks had garnered deposits of Rs 12.44 lakh crore between November 10 and December 10. In the fortnight ended December 23, deposits showed a decline for the first time since demonetisation.

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