RBI Repo Rate Cut Prompts FD Interest Rate Reductions

Several major banks have reduced their fixed deposit (FD) interest rates following the Reserve Bank of India's (RBI) decision to cut the repo rate by 25 basis points, bringing it down to 6%. This move is part of a monetary policy aimed at economic stimulation.

SBI, one of the leading banks, has announced a reduction of 10 basis points in FD rates for deposits below ₹3 crore, effective from April 15, 2025. They continue to offer an additional 50 basis points to senior citizens under the “SBI We-Care” scheme, providing a measure of relief to elderly customers.

Similarly, Bank of India (BOI) has also reduced its FD rates by up to 25 basis points and has discontinued its 400-day FD scheme, which previously offered a 7.30% return.

HDFC Bank has followed suit by trimming FD interest rates for longer tenures, while Yes Bank has reduced rates by 25 basis points on deposits maturing between 12 to 24 months. Additionally, Canara Bank has reduced its rates by up to 20 basis points for certain deposits.

Punjab National Bank (PNB), while not participating in the rate cuts, currently offers a range of 3.50% to 7.10% in FD interest rates depending on the tenure, ranging from 7 days to 10 years.

The RBI's repo rate cut has accelerated monetary transmission across banks, leading to widespread reductions in FD interest rates, particularly for tenures ranging from one to three years. This environment presents challenges to conservative investors who traditionally rely on safe returns from fixed deposits.

Indian stock markets were closed today for Ambedkar Jayanti.