RBI repo rate cut impact: SBI, Bank of India cut FD rates on select tenors

Earlier this week, the RBI’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points (bps) to 6 per cent for the second consecutive policy review, taking the cumulative cut of 50 bps in the last two months. One basis point (bps) is one-hundredth of a percentage point.

SBI FD rate cut

The country’s largest lender State Bank of India has reduced its rates by 10 basis points (bps) for deposits below Rs 3 crore and maturing between one year and less than three years, effective April 15.

Deposits from one year to less than two years of maturity will now fetch an interest rate of 6.7 per cent compared to 6.8 per cent earlier. For deposits with two years to less than three years maturity, the revised rate will be 6.9 per cent, as against 7 per cent earlier.

For senior citizens, SBI is now offering an interest rate of 7.2 per cent (7.3 per cent) on deposits maturing from one year to less than two years, and a rate of 7.4 per cent (7.5 per cent) on two years to less than three years deposits

It could be noted that SBI has recently withdrawn its Amrit Kalash special FD scheme, which offered 7.1 per cent interest for a 400-day tenure. The scheme was introduced in April 2023 and ended on March 31, 2025.

Bank of India revises FD rates

Another state-run lender, the Bank of India (BoI) has reduced interest rates on its short- and medium-term FDs for various maturities with effect from April 15, 2025.

The bank has reduced its rate for fixed deposits for amounts less than Rs 3 crore and is now offering 4.25 per cent (4.5 per cent) for deposits maturing between 91 days and 179 days and 5.75 per cent (6 per cent) for 180 days to less than one year.

However, deposits for one year would get an interest rate of 7.05 per cent, compared to 6.8 per cent earlier, while those above one year and up to two years would get 6.75 per cent (6.8 per cent).

Bank of India has also announced to withdraw its special FD scheme for 400 days where interest rate was at maximum of 7.3 per cent.

There are some other lenders also that have recently adjusted their term deposit rates and special fixed deposits schemes.

HDFC Bank has ended its special deposit scheme, which previously offered 7.35 per cent interest for 35-month deposits and 7.40 per cent for 55-month deposits. The new rate for these tenures is 7 per cent. Bandhan Bank, Equitas Small Finance Bank and Yes Bank have reduced their FD rates in the last week.

More lenders are expected to cut their deposit rates soon following the cut in the repo rate.

Economists believe that the RBI’s commitment to keep liquidity surplus in the system will aid faster transmission of 50 bps repo rate cut.

“We expect monetary policy transmission, of the 50 bps rate cuts provided since February, to money market rates and the deposit rates to start improving going forward as liquidity conditions remain comfortable,” HDFC Bank’s principal economist, Sakshi Gupta, in a recent report.