After savings rate cut, HDFC Bank shares surge 4% to highest since December

Shares of HDFC Bank went up by as much as 4 per cent on Tuesday to Rs 1,876.80. This put the stock on track for its best performance in 10 months. The rise followed the bank’s decision to lower deposit interest rates, which is expected to help its profit margins while loan growth in the banking sector is slowing.

India’s largest private bank raised its share price to Rs 1,876.80. HDFC Bank’s share price reached its highest point since early December after the bank reduced its savings account interest rate to 2.75 per cent, which is now the lowest among major private sector banks. The bank cut the rate by 25 basis points, and the new rate has been in effect since April 12, according to its website.

This decision follows the Reserve Bank of India’s second straight benchmark repo rate cut this year.

With the new rate, HDFC Bank now offers a lower interest on savings accounts than other large private banks like ICICI Bank and Axis Bank, which are both offering 3 per cent on savings balances below Rs 50 lakh.

This move could improve HDFC Bank's profit margins by five basis points starting in the first quarter of fiscal 2026, a report by news agency Reuters said.