HDFC Bank revised non-callable FD rates, offering up to 7.45 per cent returns. Learn more about the rules governing withdrawable and non-withdrawable FDs.
HDFC Bank, India's largest private sector lender, revised interest rates on non-callable fixed deposits (FDs), effective from November 27, 2023. These deposits don't allow premature withdrawals and are available for Non-Residents (NREs) also but for a minimum tenure of one year.
The bank now offers a maximum return of 7.45 per cent for non-callable deposits locked in for one to two years and 7.2 per cent for deposits ranging from two years to ten years. Non-withdrawable FDs, are only available for amounts exceeding Rs. 2 crore for resident Indian citizens. They can be booked with no option for renewal, do not allow seep-in facility, no partial withdrawal option, and quarterly interest calculations for tenures beyond six months.
For deposits spanning 1 year to less than 21 months, or any tenures in between the FD rate stands at 7.45 per cent. There are deposits maturing between 15 months to less 18 months and 18 months to less than 21 months. Deposits held for 21 months up to 2 years also yield same returns.
For tenures from 2 years 1 day to 3 years, the revised rate stands at 7.2 per cent. This also the same rate for deposits booked from 5 to 10 years.
In contrast, the bank's withdrawable deposit segment has interest range varying from 3 per cent to 7.20 per cent for general customers for tenures ranging 7 days to 10 years, while senior citizens can avail themselves of rates between 3.5 per cent to 7.75 per cent.
What Is Non-Callable Deposit?
The scheme does not permit premature withdrawal, hence the name non-callable. Typically, non-withdrawable FDs do not undergo automatic renewal. According to the Reserve Bank of India, banks can offer higher interest rates on deposits if customers do not withdraw prematurely. Generally, most deposits with a callable feature allow premature withdrawal with a penalty.
The Reserve Bank of India (RBI) on October 26 increased the minimum limit for non-callable fixed deposits (FDs) from Rs 15 lakh to Rs 1 crore. Previously, customers could opt for callable FDs (withdrawable FDs) up to Rs. 15 lakh, enabling multiple chunks of deposits of this size to deposit a higher amount, whereas now, a single premature withdrawable deposit of Rs. 1 crore can be done easily.
The attractiveness of non-callable deposits lies in their predictability, simplifying a bank's asset-liability management. So, they provide higher rates. In the event of premature withdrawal of these deposits (except for the deceased claim settlement case), the Bank will not pay any interest on the principal amount of the deposit. Any interest credited or paid up to the date of such premature closure will be recovered from the deposit. In the event of premature withdrawal of these FDs due to a death claim, interest is to be paid to the claimant.