As we know RBI Cuts Repo Rate to 6.25%; Impact on Fixed Deposits
The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points, bringing it down to 6.25% last week.
This rate cut is good news for borrowers as loan interest rates may go down. However, it could also lead to a reduction in fixed deposit (FD) interest rates.
What This Means for FD Holders?
Existing FD Holders: There is no impact on existing FD accounts. They will continue earning the same interest rate at which they were booked.
New FD Applicants: If banks decide to lower FD rates, the new rates will apply only to fresh deposits.
Opportunity to Book FDs at Higher Rates: Banks may take some time to revise their FD rates. Until then, new depositors can lock in higher interest rates currently being offered.
Banks Offering Over 8% Interest on FDs
As of February 11, 2025, 14 banks are offering more than 8% interest on fixed deposits for general citizens. The highest rate of 9% is provided by two banks.
Bank
Highest FD Rate (% p.a.)
Tenure
Unity Small Finance Bank
9%
1001 days
North East Small Finance Bank
9%
18 months 1 day to 36 months
Shivalik Small Finance Bank
8.8%
12 months 1 day to less than 18 months
Suryoday Small Finance Bank
8.6%
5 years
Utkarsh Small Finance Bank
8.5%
2 years to 3 years; 1500 days
ESAF Small Finance Bank
8.38%
888 days
Jana Small Finance Bank
8.25%
365 days to 3 years
Ujjivan Small Finance Bank
8.25%
1 year
Equitas Small Finance Bank
8.25%
888 days
SBM Bank
8.25%
Above 18 months to less than 2 years 3 days
AU Small Finance Bank
8.1%
18 months
DCB Bank
8.05%
19 months to 20 months; above 26 months to less than 61 months
Bandhan Bank
8.05%
1 year
RBL Bank
8%
500 days
Source: Respective Bank Website as on February 12, 2025.
Important Note: Some of these are small finance banks, which are covered under RBI’s ₹5 lakh deposit insurance guarantee. However, investing large amounts in these banks may carry some risk.
Disclaimer: The above information is for general awareness only and does not represent recommendations by Ved Khabar. Always consult a financial expert before making investment decisions.