,HDFC Bank has cut interest rates on fixed deposit (FD) maturities with effect from September 13, 2019. This is the second revision by the bank after it had tweaked FD interest rates last month. With the bank cutting FD rates by 0.10% to 0.30%, this will negatively impact the interest income earned by deposit holders of HDFC Bank. After RBI’s August repo rate cut, many banks including SBI, Axis Bank, Kotak Mahindra Bank and Bank of India have revised FD interest rates in the month of September. Let us find out the impact of HDFC Bank’s latest FD interest rate revision.
Let us first focus on HDFC Bank’s latest FD rates for deposits below Rs 2 crore for general public. On FDs of one year tenure, HDFC Bank has slashed the interest by 0.30% (30 basis points) with these FDs giving 6.6.% under new rates effective September 13, compared to 6.90% earlier. This means a Rs 10 lakh FD under new rates will fetch Rs 67,652 interest — down Rs 3,154 from Rs 70,806 earlier.
On FDs between one year-one day to two years tenure, HDFC Bank has cut the interest rate by 0.20% (20 basis points). These FDs booked from September 13 will now fetch an interest rate of 6.60% compared to 6.80% earlier. This means a Rs 10 lakh FD for two years will give Rs 139,880 interest income — down Rs 4,493 from Rs144,373 earlier.
On longer-term FDs i.e. tenures between two years-one day to three years tenure; three years-one day to five years; five years-one day to 10 years, HDFC Bank has lowered interest rates by 0.10% (10 basis points). Depending on the tenure, your FD interest income for new FDs booked from September 13, 2019 will go down by Rs 3,635 to Rs 19,579 for a Rs 10 lakh FD.
Take a look at the impact of the FD rate revision for Rs 10 lakh FD. Do remember these are general public rates. Senior citizens get 0.50% (50 basis points more). Check out the latest FD rates here.
If you are thinking of switching FDs from HDFC Bank, do bear in the mind the likely costs. In case of premature closure of Fixed Deposit (including sweep in / partial closure) the interest rate will be 1.00% below the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower (except for the deposits booked with tenure 7-14 days).