The Reserve Bank of India (RBI) reduced the repo rate by 0.25% (25 basis points) on 9 April 2025. This is part of a total 0.50% cut since February 2025.
This change is affecting fixed deposit (FD) interest rates, with most banks lowering their FD rates. This has surprised many low-risk investors, especially senior citizens, who rely on FDs for income.
Additionally, several banks have discontinued special tenure FDs, such as SBI’s Amrit Kalash and Bank of India’s 400-day scheme. However, some banks are still offering good interest rates on 3-year FDs, providing relief for both common investors and senior citizens.
Which banks are offering the best interest rates?
Equitas Small Finance Bank
General public: 7.75%, Rs 1 lakh becomes Rs 1.26 lakh
Senior Citizens: 8.25%, Rs 1 lakh becomes Rs 1.28 lakh
AU Small Finance Bank
General public: 7.5%, Rs 1 lakh becomes Rs 1.25 lakh
Senior Citizens: 8%, Rs 1 lakh becomes Rs 1.27 lakh
Canara Bank
General public: 7.2%, Rs 1 lakh becomes Rs 1.24 lakh
Senior Citizens: 7.7%, Rs 1 lakh becomes Rs 1.26 lakh
Bank of Baroda
General public: 7.15%, Rs 1 lakh becomes Rs 1.24 lakh
Senior Citizens: 7.65%, Rs 1 lakh becomes Rs 1.26 lakh
HDFC, ICICI, and Axis Bank
General public: 6.9%, Rs 1 lakh becomes Rs 1.23 lakh
Senior Citizens: 7.4%, Rs 1 lakh becomes Rs 1.25 lakh
State Bank of India (SBI) and Punjab National Bank (PNB)
General public: 6.75%, Rs 1 lakh becomes Rs 1.22 lakh
Senior Citizens: 7.25%, Rs 1 lakh becomes Rs 1.24 lakh
Union Bank of India
General public: 6.7%, Rs 1 lakh becomes Rs 1.22 lakh
Senior Citizens: 7.2%, Rs 1 lakh becomes Rs 1.24 lakh
Bank of India
General public: 6.5%, Rs 1 lakh becomes Rs 1.21 lakh
Senior Citizens: 7%, Rs 1 lakh becomes Rs 1.23 lakh
Indian Bank
General public: 6.25%, Rs 1 lakh becomes Rs 1.20 lakh
Senior Citizens: 6.75%, Rs 1 lakh becomes Rs 1.22 lakh
Who should invest?
For safe and fixed returns, Equitas and AU Small Finance Bank are currently offering the highest interest rates. These banks offer over 8% for senior citizens, which is a great option right now.
Since interest rates may change, it’s advisable to check the latest rates on the bank’s website or visit a branch. Remember, FD interest is taxable.
Senior citizens (aged 60 and above) are eligible for additional interest. If you’re seeking a secure investment with guaranteed returns, 3-year FD schemes from small finance banks are still a solid choice.
