HDFC Bank increases fixed deposit interest rates by up to 20 basis points

It will offer 7.35% and 7.40% on fixed deposits below Rs 3 crore for 35 months and 55 months tenors

HDFC Bank has increased interest rates on fixed deposits for certain tenors from July 24, making the revision as it seeks to fund its credit growth.

Interest rates on deposits for 35 months and 55 months for deposits below Rs 3 crore have been revised upwards by 20 basis points to 7.35 per cent and 7.40 per cent, respectively.

After the revision in interest rates, 7.40 per cent is the highest rate being offered by the lender for fixed deposits below Rs 3 crore.

HDFC Bank’s deposit accretion saw a sequential decline in the first quarter of FY25 to Rs 23.79 trillion. “This time around we were surprised with the period-end numbers because of some unexpected flows in the current account, which were more than what we had anticipated,” said Sashidhar Jagdishan, the bank's managing director and chief executive officer, in an analyst call after first-quarter (Q1) earnings earlier.

HDFC Bank has said it will grow its advances slower than its deposits to bring down its elevated credit–deposit ratio.

During the analyst call, the bank said it would not be involved in any competition on interest rates to attract deposits. It would instead rely on “engagement and service delivery” to get deposits.

“The rate is not a predominant determinant or driver for us to have an engagement. We don’t get into rate competition; we are priced fairly with our peers. And this is not something that we want to use to gather more deposits,” said the bank’s senior management.

State Bank of India (SBI) and Bank of Baroda (BoB) are among public sector banks that have launched special deposit schemes and are offering attractive interest rates for a limited period of time to garner more deposits.

SBI’s 444-day monsoon special retail deposit scheme is offering 7.25 per cent interest while BoB said its special scheme dubbed “the Monsoon Dhamaka Deposit Scheme” comes with two tenor buckets — offering interest rates of 7.25 per cent per annum for 399 days and 7.15 per cent per annum for 333 days.