HDFC to offer variable interest rates to depositors

MUMBAI: Setting a new trend in the way lenders offer deposit products, leading home loan financier, HDFC on Tuesday came with a special monthly deposit product to its customers that promises higher returns by offering variable rate of interest.

The product, which is similar to recurring deposit(RD) schemes offered by banks, promises variable interest rate earnings to clients unlike the fixed interest rate structure of RDs.

The scheme -HDFC Systematic Savings Plan- will be available from tomorrow for customers in select cities. The customer can deposit a fixed monthly instalment -- in the range from Rs 2,000-Rs 50,000 every month and can choose any period between 24 to 60 months.

When compared to the fixed deposits offered by most of the banks in the same maturities, variable rates offer 0.25-0.5 per cent more returns to the depositor. The rate will be reset at the beginning of each quarter, HDFC General Manager, Resources, Dilip Shetty told.

"We assess our borrowing costs on an ongoing basis and reprice the deposit products according to the prevailing market conditions. In the current scenario, this scheme offers very attractive returns in this segment," Shetty said.