HDFC Bank, ICICI Bank, Federal slash savings rates: New terms explained

Lenders shift too flat rates and others continue with tiered returns after central bank's policy decisions

State Bank of India, HDFC Bank, ICICI Bank and other lenders slashed interest rates on savings accounts after a 50 basis point (0.5 per cent) repo rate cut by the Reserve Bank of India (RBI).

 

Some major banks have shifted to a flat-rate structure, irrespective of the account balance.  Here are there new terms.

 

State Bank of India (SBI)

 

New rate: 2.5 per cent per annum for all balances (Effective from June 15)

 

Earlier rates: 2.7 per cent (below Rs 10 crore), 3 per cent (Rs 10 crore and above)

 

HDFC Bank

 

New rate: 2.75 per cent per annum across all balances (From June 10)

 

Earlier rates: 2.75 per cent (below Rs 50 lakh), 3.25 per cent (Rs 50 lakh and above)

ICICI Bank

 

New rate: 2.75 per cent per annum across all balances (From June 12)

 

Earlier rates: 2.75 per cent (below Rs 50 lakh), 3.25 per cent (Rs 50 lakh and above)

 

Revised slab-based rates at other banks

 

Some banks continue to offer tiered interest rates based on account balance:

Bank of Baroda

 

Revised rates: Between 2.7 per cent and 4.25 per cent per annum (From June 12)

Federal Bank

 

Revised Rates: Between 2.5 per cent and 6.25 per cent per annum (From June 17)

IndusInd Bank

 

Revised rates: Between 3 per cent and 5 per cent per annum (From June 16)

 

RBL Bank

 

Revised rates: Between 3 per cent and 6.75 per cent per annum (From June 16)

 

Impact on bank customers

 

Lower returns: Uniform rates at major banks mean reduced earnings on high-balance accounts.

 

Opportunity in smaller banks: RBL and Federal Bank offer relatively higher returns, especially for higher balances.

 

Need to reassess: Customers may consider shifting to banks offering better interest or explore alternative investment options like fixed deposits, liquid funds, or recurring deposits.