FDS IN MAY 2025: FIXED DEPOSIT INTEREST RATES UPDATED — SEE WHICH BANKS OFFER THE BEST RETURN THIS MONTH
In the wake of the Reserve Bank of India's decision to cut the repo rate by 25 basis points to 6% in April, leading banks have adjusted their fixed deposit (FD) interest rates. This move, effective from May 1, 2025, is in response to the RBI's shift from a 'neutral' to an 'accommodative' stance, making borrowing cheaper and affecting deposit rates across the banking sector. As banks align their interest offerings with the new cost of borrowing, customers will see revised rates on their fixed deposits.
Punjab National Bank has decreased its FD interest rates for retail deposits under Rs 3 crore by up to 25 basis points. The revised rates range from 3.50% to 7.10% for terms between 7 days and 10 years. The highest return of 7.01% is available for a 390-day term.
Similarly, Kotak Mahindra Bank has lowered its rates to between 2.75% and 7.15% for regular customers, with senior citizens benefiting from rates between 3.25% and 7.65%. These adjustments highlight the banks' efforts to manage liquidity in a changing economic environment.
The State Bank of India (SBI) has announced a reduction of 10 basis points in its fixed deposit (FD) interest rates for deposits with a tenure ranging from one to three years. For deposits maturing between one and two years, the bank now offers an interest rate of 6.7% for general citizens and 7.2% for senior citizens. Similarly, for deposits maturing between two and three years, the interest rates have been set at 6.9% for general customers and 7.4% for senior citizens.
IDFC FIRST Bank's new interest rates range from 3% to 7.25% for deposits below ₹3 crore, with senior citizens receiving 3.5% to 7.75%. The most attractive rates are offered for a 400-500 day tenure.
Meanwhile, AU Small Finance Bank provides rates between 3.75% and 7.75% for general citizens, and 4.25% to 8.05% for seniors. IndusInd Bank has taken a different approach by increasing rates for long-term deposits while reducing them for short-term ones. Their new rates span from 3.5% to 7.75% for regular customers and up to 8.25% for seniors, with the highest rates applicable to deposits over 15 to 16 months.
Bandhan Bank has also revised its FD interest rates, offering between 3% and 7.75% for deposits under Rs 3 crore. Senior citizens are offered between 3.75% and 8.25%, with the highest rates applicable for a one-year term. These changes reflect banks' strategies to remain competitive while adapting to the lower repo rate environment.
Fixed deposits remain a popular choice for risk-averse investors due to their stable returns and capital preservation, despite these fluctuating rates. The adjustments across these banks underscore a broader trend in the financial sector, where institutions are realigning their interest offerings in response to macroeconomic policies.
With banks like HDFC Bank and SBI also revising their rates in response to the RBI's decision, the financial landscape continues to evolve. This ensures that customers receive rates that reflect the current economic conditions, providing both opportunities and challenges for investors seeking reliable returns on their savings.
2025-05-09T06:45:16Z