HDFC Bank Cuts Interest Rate on Savings Account, after the Reserve Bank of India (RBI), after cutting 25 basis points (BPS) in the repo rate, the country’s largest private sector bank HDFC Bank has also reduced the interest rates on its savings accounts. This change has become effective from 12 April 2025. Now HDFC Bank will give 2.75% interest at a balance of up to ₹ 50 lakh and 3.25% interest at a balance of more than ₹ 50 lakh, which was earlier 3% and 3.5% respectively. This is the lowest interest rate in private sector banks. The main objective of this deduction is to reduce the cost of funds and maintain the bank margin.
No increase in 14 years, just cuts
HDFC Bank has not increased the interest rate on savings accounts in the last 14 years. In 2011, this rate was at the highest level of 4%, but since then it has been continuously decreasing. Currently, the bank has a savings balance of more than ₹ 6 lakh crore, and the bank is expected to save about ₹ 1,500 crores annually with this 25 BPS deduction. This step is part of the bank’s strategy, as low interest rates can attract customers from savings accounts to fixed deposits (FD), where better returns are received.
There is a major change in the banking sector. People are now using savings accounts mainly for transactions, not for savings. Most consumers are investing their additional amount in fixed deposits, where they get better interest rates. Due to this, there is a decrease in low -cost deposits of banks (CASA -current and savings account). The CASA deposit ratio in HDFC Bank has also been affected, especially after merger with HDFC Limited in 2023, when its credit-deeporest (CD) ratio went above 100%. However, now this ratio has come up to 98%.
These banks also cut interest rates
HDFC Bank is not the only one that has cut interest rates. Many other banks and financial institutions have also stepped on the same path: HDFC Bank has cut a few selected fixed deposits (FD) interest rates by 35-40 basis points since 1 April 2025. Yes Bank has reduced its FD rates by 25 BPS. Bandhan Bank has reduced the interest rate on savings accounts between 6% to 3% -5%, which is applied on the basis of balance. [Ref web ID: 17]
Bajaj Finance has cut the interest rate of 0.25% on long -term FD by 0.25%. Bank of India has discontinued its 400 -day special FD scheme, giving 7.3% interest.
