The country's largest private sector lender HDFC Bank on Friday slashed interest rates on fixed deposits (FD) below Rs 2 crore for the second time in August. However, the rate will vary from 3.50 per cent to 7 per cent on the basis of investment amount and period of deposit. For senior citizens, the interest rates on investment below Rs 2 crore will be between 4 per cent to 7.50 per cent. The new FD rates have come into effect on August 30, the date of announcement, itself.
"The revised interest rates for FD for 7-14 days is 3.50 per cent; 4.25 per for 15-29 days; 5.15 per cent for 30-45 days; 5.65 per cent for 46-60 days to 6 months; 6.25 per cent for 181 days to 9 months; 6.35 per cent for 9 months 1 day-1 year; 6.9 per cent for 1 year; 6.8 per cent for 1 year 1 day-2 years; 7.1 per cent for 2 years 1 day-3 years; and 7 per cent for 3 years 1 day-10 years," the HDFC Bank said in a statement on its website.
The move follows the rate cut on fixed deposits by the country's largest lender State Bank of India (SBI) on August 23. SBI revised its interest rate on Term Deposits with effect from August 26, 2019, in view of the falling interest rate scenario and surplus liquidity. Another private sector lender, which revised its FD rates recently, is Punjab National Bank (PNB).
The revision comes just after the Reserve Bank of India (RBI) in its third bi-monthly policy had reduced repo rate by 35 basis point (from 5.75 per cent to 5.40 per cent) with effect from August 7, 2019.
A fixed deposit (FD) is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. Customers need to choose an investment amount and a deposit period ranging between 7 days to 10 years.
The interest rate typically ranges from 5.75 per cent to 7.50 per cent in a year but varies from bank to bank based on the investment and tenure. The rate offered to senior citizens are generally 0.5 per cent higher than the regular customers.