HDFC Bank cuts savings account interest rate by 0.5%

Private sector lender HDFC Bank has reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent on deposits up to Rs 50 lakh.

However, the bank will continue to pay 4 per cent interest on deposits of above Rs 50 lakh.

"Post revision, customers maintaining savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4 per cent per annum. Customers maintaining account balance of below Rs 50 lakh will earn interest at 3.5 per cent per annum," HDFC Bank said in a regulatory filing.

The revised rates will be applicable to both resident and non-resident customers. The new interest rates will be effective from August 19, it added.

On July 31, SBI slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below.

Earlier this month, Axis Bank had also reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh.

Another PSU lender Bank of Baroda had cut the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too has tweaked the interest rate on savings bank accounts.