The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points (bps) in the February monetary policy committee (MPC) meeting after keeping it unchanged since 2023.
The long-anticipated rate cut will have a rippling effect on the deposit and lending rates. Banks providing loans on the marginal cost of funds-based lending rate (MCLR) basis will be affected by this and reduce their rates taking into consideration their deposit availability and liquidity requirement.
Likewise, the deposits rates will also be aligned with the rate cut. Amid this scenario, senior citizens who generally avoid taking risks by investing in equity instruments, may think of taking a higher exposure to fixed deposits (FDs).
One major reason could be the rise in the tax deducted at source (TDS) threshold. In Budget 2025-26, the TDS threshold has also been doubled for senior citizens from Rs 50,000 to Rs 1 lakh in a year and from Rs 40,000 to Rs 50,000 for others.
So, on an interest payment of up to Rs 1 lakh to seniors, TDS will not be deducted from the next financial year. This suggests a good time to lock-in at FDs before banks reduce FD rates. However, the repo rate transmission to the banks’ rates will also depend on the market competition and liquidity conditions of each bank.
Here is a list of different banks (public, private and small finance banks) and the highest rates they are offering as of February 10, 2025 at the time of writing this article. Seniors can avail of up to 9.50 per cent on their FDs.
Public Sector Banks
State Bank of India (SBI): 7.50 per cent for two years to less than three years
Punjab & Sind Bank: 7.95 per cent for 555 days
Punjab National Bank: 7.75 per cent for 400 days
Bank of Baroda: 7.80 per cent Bob Utsav deposit scheme for 400 days
Bank of India: 7.80 per cent for 400 days
Indian Bank: 7.80 per cent for 400 days
Central Bank of India: 7.75 per cent for two years to less than three years
Union Bank of India: 7.80 per cent for 456 days
UCO Bank: 7.55 per cent for 333-400 days
Indian Overseas Bank: 7.80 per cent for 444 days
Canara Bank: 7.90 per cent for three years and above to less than five years
Bank of Maharashtra: 7.25 per cent for 365 days
Also Read: Outlook Money 40After40: Ankur Warikoos’s 3 Lessons To Master The Art Of Relying On Yourself
Private Sector Banks
Bandhan Bank: 8.55 per cent for one year
Dhanlaxmi Bank: 7.75 per cent for ‘555 Days’ and ‘Above 3 years to 5 years’
CSB Bank: 8.00 per cent for 501 days
City Union Bank: 8.00 per cent for 333 days
DCB Bank: 8.55 per cent for various tenures (19 months to 20 months, More than 26 months to less than 61 months
J&K Bank: 7.50 per cent for ‘333 days’ and ‘one year to less than three years’
Karnataka Bank: 8.00 per cent for 375 days
Karur Vysya Bank: 8.10 per cent for 760 days special deposit
Nainital Bank: 7.25 per cent for 725 days
RBL Bank: 8.50 per cent for 500 days
South Indian Bank: 7.90 per cent for ‘1 year 7 days’ and ‘18 months’
Tamilnad Mercantile Bank: 8.10 per cent for 300 days
Yes Bank: 8.50 per cent for 18 months
IDBI Bank: 7.50 per cent for more than two years to less than three years
ICICI Bank: 7.85 per cent for 15 months to less than 18 months
Axis Bank: 7.75 per cent for ‘15 months to less than two years’ and ‘Five years to 10 years’
HDFC Bank: 7.90 per cent for Four year 7 months to 55 months
IDFC First Bank: 7.90 per cent for 400-500 days
Federal Bank: 8.00 per cent for 444 days
Kotak Mahindra Bank: 7.90 per cent for 390 days to Less than 23 months
IndusInd Bank: 8.49 per cent for one year 5 months to less than one year 6 months
Also Read: RBI Repo Rate Cut: Lower Home Loan EMIs, Reduction In Unsold Inventory, Say Experts
Small Finance Banks (SFBs)
AU Small Finance Bank: 8.60 per cent for 18 Months
Equitas SFB: 8.75 per cent for 888 days
Jana SFB: 8.75 per cent for from 365-1,095 days
North East SFB: 9.00 per cent for 18 months 1 Day to 36 months
Utkarsh SFB: 9.10 per cent for ‘Two years to three years’ and ‘1500 days’
ESAF SFB: 8.88 per cent for 888 days
Unity SFB: 9.50 per cent for 1001 days
Ujjivan SFB: 8.75 per cent for 12 months
Suryoday SFB: 9.10 per cent for five years
Capital SFB: 8.10 per cent for 400 days
Shivalik SFB: 9.30 per cent for 12 months 1 day to less than 18 months
While banks adjust their rates based on the latest repo rate and their liquidity requirement, investors and small savers can take benefit of the existing higher rates and lock in their FDs at higher rates.