HDFC Bank has made another move that’s bound to disappoint depositors. The bank has cut its fixed deposit interest rates for the second time this month, effective June 25, 2025. This latest reduction of 25 basis points applies to select FD tenures for deposits below Rs 3 crore.
The decision comes just two weeks after a similar rate cut on June 10, following the Reserve Bank of India’s decision to lower the repo rate from 6 percent to 5.5 percent. As India’s largest private bank, HDFC’s actions often set the trend for other lenders. This could mean more banks may follow suit, leaving FD investors with lower returns.
For those with fixed deposits in the 15-month to less than 18-month bracket, the rates have fallen. General customers previously earned 6.60 percent, which has now dropped to 6.35 percent. Senior citizens saw their rate dip from 7.10 percent to 6.85 percent.
HDFC Bank’s revised FD rates now range from 2.75 percent to 6.60 percent for the general public and 3.25 percent to 7.10 percent for senior citizens, depending on the tenure. If you were planning to lock in funds for a fixed return, this rate cut could change your calculations.
Breaking an FD before maturity has its downsides too. HDFC Bank imposes a penalty where early withdrawals earn 1 percent less than the actual tenure rate, not the original booked rate. This could significantly dent your returns if you need liquidity before the maturity date.
The bank hasn’t stopped at FDs. Savings account holders are also affected. From June 24, 2025, the interest rate on savings accounts has been reduced by 25 basis points, bringing it down from 2.75 percent to 2.50 percent per annum. Interest on savings accounts is calculated daily and credited quarterly, so this cut will impact all account holders.
Recurring deposit (RD) rates, however, remain unchanged since June 10, 2025. For general customers, RD rates range between 4.25 percent and 6.60 percent, while senior citizens get between 4.75 percent and 7.10 percent.
Two rate cuts in one month signal a challenging period for HDFC Bank’s depositors. Those relying on fixed deposits or savings accounts for steady returns might need to reassess their financial strategies.