5 Major Banks That Have Reduced Fixed Deposit Interest Rates Post RBI Monetary Policy

June 26, 2025 By: Loan Advisor

New Delhi, June 18, 2025 — In response to the Reserve Bank of India’s (RBI) latest monetary policy decision, several leading Indian banks have revised interest rates on fixed deposits (FDs) and savings accounts. The RBI, in its June 6 policy review, reduced the repo rate by 50 basis points to 5.50% — the second cut this year, totaling a 100 bps reduction since February 2025. The move is aimed at stimulating growth and aligning inflation with the central bank’s target.

The repo rate cut has prompted a broad-based decline in deposit rates across both public and private sector banks. Here’s a breakdown of how five major banks have adjusted their rates:

🏦 1. State Bank of India (SBI)

• FD Rates (Effective June 15, 2025):
  • General Public: 3.50% – 6.50%
  • Senior Citizens: Additional 50 bps on select tenures
• Savings Account Rate:
  • Cut from 2.70% to 2.50% (uniform across all balance slabs)

🏦 2. HDFC Bank

• FD Rates (Deposits below ₹3 crore):
  • General Public: 2.75% – 6.60%
  • Senior Citizens: 3.25% – 7.10%
• Savings Account Rate:
  • Previously tiered, now standardized at 2.75% for all balances

🏦 3. ICICI Bank

• FD Rates (Deposits below ₹3 crore):
  • General Public: 3.00% – 6.60%
  • Senior Citizens: 3.50% – 7.10%
  • Note: Reductions apply to select tenures
• Savings Account Rate:
  • Adjusted in response to policy; specific tiers not disclosed

🏦 4. Kotak Mahindra Bank

• FD Rates:
  • Range from 3.25% to 6.75% (depending on tenure and amount)
• Savings Account Rate:
  • Revised downward; varies by account balance

🏦 5. IDFC First Bank

• FD Rates:
  • Generally between 3.50% and 7.00%
• Savings Account Rate:
  • Reduced following repo rate cut; detailed structure not specified

📉 Policy Transmission in Motion

According to the RBI, the Weighted Average Domestic Term Deposit Rate (WADTDR) on fresh deposits dropped by 27 basis points between February and April 2025, indicating the gradual transmission of monetary policy. Lending rates have also seen slight declines during this period.

With surplus liquidity and easing inflation, banks are realigning deposit and savings rates to reflect the new monetary landscape. Experts believe further rate revisions could be on the horizon if the RBI continues with its accommodative stance in upcoming policy reviews.

• Fixed Deposits (FD)