Soon after interest rate on savings account deposits was slashed by State Bank of India, Bank of Baroda and Axis Bank, HDFC Bank Ltd — one of India’s premier banks – today reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh. However, the bank said that it will continue to pay 4 per cent interest on deposits of above Rs 50 lakh. HDFC Bank said in press release that it has revised its savings bank interest rate effective August 19, 2017. Post revision, customers maintaining savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4% per annum, while customers maintaining account balance of below Rs 50 lakh will earn interest at 3.5% per annum. The revised rates will be applicable to both resident and non-resident customers.
It may be noted that on July 31, the country’s largest lender State Bank of India had slashed interest rate on savings account deposits by 50 basis points to 3.5% on balance of Rs 1 crore and below. However, SBI continues to offer 4% interest on savings account balance of Rs 1 crore and above. “The decline in the rate of inflation and high real interest rates are the primary considerations for warranting a revision in the rate of interest of savings bank deposits,” it had said.
Axis Bank, on the other hand, was the fourth lender to reduce the interest rate after market leader SBI begun the process of reducing interest rate on savings bank account on July 31. “… the bank has revised the interest rate downward on Savings Account balance by 50 bps to 3.50 per cent per annum on balance of up to Rs 50 lakh,” Axis Bank had said in a regulatory filing recently.