HDFC Bank has announced a 25 basis points reduction in interest rates on its savings bank deposit accounts, marking the first cut since April 2022. Effective from 12 April 2025, this revision affects all customers across savings account balances. For balances below Rs 50 lakh, the interest rate is now 2.75% per annum, down from 3%. Balances of Rs 50 lakh and above will earn 3.25% per annum, reduced from the previous 3.50%.
The interest on savings accounts is calculated using the daily closing balance, with interest credited monthly or quarterly. This move follows the Reserve Bank of India’s decision to lower the policy rate by 25 basis points. The bank had last decreased rates for balances above Rs 50 lakh in June 2020, during the COVID-19 pandemic. Over the past 14 years, HDFC Bank has maintained its savings rates, as customers generally prefer fixed deposits for excess funds rather than savings accounts, which are mainly used for transactions.
International brokerage Goldman Sachs views this rate cut as a reflection of HDFC Bank’s confidence in deposit accretion. It aligns with the central bank’s stance, likely easing margin pressures amid potential further rate cuts. The Reserve Bank of India’s Monetary Policy Committee recently reduced the repo rate by 25 basis points, from 6.25% to 6%, on 9 April. RBI Governor Sanjay Malhotra noted that a surplus in the banking system’s liquidity was achieved through measures injecting about Rs 6.9 lakh crore.
Adhil Shetty, CEO of BankBazaar, said: “With the RBI cutting the repo rate by 50 basis points and banks responding by slashing savings and FD rates, we are clearly entering a softer interest rate regime. If inflation remains within the RBI’s comfort zone, further rate cuts are likely in the coming quarters. This signals a shift towards cheaper borrowing, encouraging consumption and investment.”
Savings account interest rate
State Bank of India (SBI) offers a savings account interest rate of 2.70% per annum for balances below Rs 10 crore. For balances of Rs 10 crore and above, the rate increases to 3%. These rates have been in effect since October 15, 2022.
ICICI Bank provides an interest rate of 3% for savings accounts with balances below Rs 50 lakh. If the balance is Rs 50 lakh or more, the rate goes up to 3.50%. These rates are applicable based on end-of-day balances.
Punjab National Bank (PNB) offers a tiered interest rate structure: 2.70% for balances below Rs 10 lakh, 2.75% for Rs 10 lakh to less than Rs 100 crore, and 3% for Rs 100 crore and above. These rates came into effect on January 1, 2023.
The Post Office Savings Account functions similarly to standard savings accounts, requiring a minimum deposit of Rs 500. It currently offers an interest rate of 4% for the quarter April–June 2025, with a tax exemption of up to Rs 10,000 under Section 80TTA.