Banks Announce FD Rate Reductions After RBI Rate Cut Decision

The Reserve Bank of India’s (RBI) decision on April 9 to reduce the repo rate by 25 basis points to 6.25 per cent triggered multiple banks to slash their fixed deposit (FD) interest rates.

Kotak Mahindra Bank had cut FD rates by up to 15 basis points across select tenures, effective April 9. Rates for general customers now range from 2.75 per cent to 7.30 per cent, while senior citizens earn between 3.25 per cent and 7.80 per cent. The bank specifically lowered the 390-day deposit rate from 7.40 per cent to 7.25 per cent, and slashed the 391-day to 23-month tenure rate to 7.30 per cent.

“Savings deposit share holds around 30 per cent and remained sticky in interest rate. So, the overall transmission to deposit rates remained low as savings deposit rates remained unresponsive to policy rate changes,” State Bank of India (SBI) noted in a recent research report.

Other Banks That Reduced FD Rates

The broader trend is now visible across both public and private sector banks. Canara Bank revised its FD rates on April 10, trimming rates by up to 20 basis points for deposits below ₹3 crore. The bank now offers 4 per cent to 7.25 per cent for general depositors and 4 per cent to 7.75 per cent for senior citizens, compared to earlier highs of 7.40 per cent and 7.90 per cent, respectively.

For instance, deposits maturing between 180–269 days now yield 6.15 per cent, down from 6.25 per cent, while the rate for tenures over two years but under three has been lowered from 7.30 per cent to 7.15 per cent. The maximum offered rate post-cut is 7.25 per cent for the 444-day tenure.

HDFC Bank discontinued its special deposit schemes that had offered 7.35 per cent and 7.40 per cent for 35-month and 55-month FDs. The new rate for both is now 7 per cent. It also reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points, effective April 7, with the new lending rates ranging from 9.10 per cent to 9.35 per cent.

The trend extended to smaller lenders. Shivalik Small Finance Bank adjusted FD rates downward by up to 25 basis points. As of April 11, the bank offers between 3.50 per cent and 8.30 per cent for general customers, and 4 per cent to 8.80 per cent for senior citizens, down from previous highs of 8.55 per cent and 9.05 per cent.

Likewise, Yes Bank had cut its fixed deposit interest rate by 25 basis points (0.25 per cent) on select tenures. For deposits maturing between 12 months and 24 months, the rate has been reduced from 8.00 per cent to 7.75 per cent. However, this happened before the RBI MPC rate cut announcement.

India’s largest lender, State Bank of India (SBI), also withdrew its Amrit Kalash scheme, which had offered 7.10 per cent for a 400-day tenure. Launched in April 2023, the scheme was discontinued on March 31, 2025.