Mumbai: IDFC First Bank has cut interest rates and tweaked slabs for savings accounts by up to 200 basis points for certain categories, marking one of the sharpest reductions by a private lender in recent months, according to a revised rate card effective 9 January.
Under the revised structure, balances of ₹1 lakh to ₹10 lakh will earn 5% interest as against the 7% that the bank earlier offered for the slab of ₹5 lakh to ₹5 crore. This effectively represents a 200-bps cut in interest rate for the popular slab, which had earlier helped the bank attract large inflows from retail and high-value customers.
While the interest rate on a balance of below ₹1 lakh remains at 3%, that for the ₹10 lakh to ₹10 crore slab will now earn 6.50% interest per annum. Under the outgoing structure, a 6.75% interest was given on savings in the band of ₹5 crore to 10 crore.
Rate to remain unchanged
For a balance in the slab of ₹10 crore to ₹25 crore, the rate will remain unchanged at 6%, as also for bigger ticket savings of up to ₹100 crore that will stay at 5%, and 4% for amounts of over ₹100 crore.
The private sector bank's interest rate cut comes at a time when banks have been struggling to garner deposits amid strong credit growth. Last month, the Reserve Bank of India cut the policy repo rate by 25 bps, taking total rate cuts in 2025 to 125 bps.
For customers, the move signals lower returns on idle savings and it may push surplus funds towards alternative investment avenues offering higher yields.
The bank said the interest on savings accounts will continue to be calculated on a progressive basis, meaning different portions of the balance earn interest at varying slab rates, and will be credited monthly. The bank said interest will be computed daily end-of-day balances, in line with Reserve Bank of India norms.
