Rate Cut Reloaded: HDFC Trims FD Returns Twice in One Month—Should You Worry?

HDFC Bank has announced its second fixed deposit (FD) rate cut in June 2025, tightening returns for conservative investors. Effective June 25, the bank reduced interest rates by 25 basis points on select tenures, following an earlier cut on June 10. This move aligns with the Reserve Bank of India’s recent repo rate reduction from 6% to 5.5%.

 

Key Highlights:

 

- The revised rates apply to FDs under ₹3 crore with a tenure of 15 months to less than 18 months.

- General customers: Rate reduced from 6.60% to 6.35%

- Senior citizens: Rate reduced from 7.10% to 6.85%

- Savings account rates have also been trimmed by 25 basis points, now offering 2.50% per annum, down from 2.75%, effective June 24.

- Recurring deposit (RD) rates remain unchanged, ranging from 4.25% to 6.60% for general customers and 4.75% to 7.10% for seniors.

- Premature withdrawal penalty: Investors will receive 1% less than the applicable rate for the actual tenure completed—not the originally booked rate.

 

This back-to-back rate cut signals a broader trend of declining deposit yields, prompting savers to reassess their investment strategies. While FDs still offer capital safety, the shrinking interest margins may push risk-averse investors toward diversified fixed-income options.

 

Source: Business Standard, India Today, Zee News