In a move aligned with the Reserve Bank of India’s latest policy direction, several major Indian banks have revised their fixed deposit (FD) interest rates as of mid-April 2025. This change comes in the wake of the RBI reducing the repo rate by 25 basis points to 6%, shifting its stance to “accommodative” to boost liquidity in the economy.
The rate adjustment reflects a wider monetary strategy aimed at making credit more accessible and stimulating economic growth. However, for conservative investors relying on FDs, these reductions signal a potential decline in returns, especially in the short- to mid-term horizon.
Updated Fixed Deposit Rates of Major Banks (As of April 16, 2025)
| Bank | Tenure | Old Rate | New Rate |
|---|---|---|---|
| SBI | 1 year to < 2 years | 6.80% | 6.70% |
| 2 years to < 3 years | 7.00% | 6.90% | |
| Bank of India | 91 to 179 days | 4.50% | 4.25% |
| 180 days to < 1 year | 6.00% | 5.75% | |
| 1 to 2 years | 6.80% | 6.75% | |
| HDFC Bank | 2 years 11 months | Reduced by 35 bps | Updated rates not disclosed |
| 4 years 7 months | Reduced by 40 bps | Updated rates not disclosed | |
| Yes Bank | 12 to 24 months | Reduced by 25 bps | Updated rates not disclosed |
| Canara Bank | 444 days | 7.25% | 7.25% (Unchanged) |
| PNB | 390-day FD | Highest at 7.10% | Highest at 7.10% |
SBI Revises FD Interest Rates from April 15, 2025
State Bank of India, the country’s largest public lender, implemented a 10 basis point cut on select fixed deposits beginning April 15. The revision applies to retail deposits below ₹3 crore. Despite the rate reduction, senior citizens continue to receive an additional 50 basis points under the SBI We-Care scheme, providing them with slightly better returns in a declining rate environment.
Bank of India Adjusts Rates and Withdraws Popular FD Scheme
Bank of India (BOI) revised its short and medium-term FD rates, cutting them by up to 25 basis points. Notably, the bank has discontinued its high-interest 400-day scheme that previously offered 7.30%, a favorite among risk-averse investors.
HDFC and Yes Bank Implement Steep Rate Reductions
Private sector giants HDFC Bank and Yes Bank have also aligned with the new monetary environment. HDFC has made sharp reductions on long-term FDs—by 35 basis points for tenures close to three years and by 40 basis points for terms nearing five years.
Yes Bank reduced interest rates by 25 basis points on FDs maturing between 12 and 24 months, further tightening returns for medium-term depositors.
PNB and Canara Bank Offer Mixed Signals
Punjab National Bank (PNB) has kept its FD rates within the range of 3.50% to 7.10%, with the 390-day FD continuing to offer the best yield. Meanwhile, Canara Bank has made moderate cuts on select tenures but retained its 7.25% interest on the 444-day deposit.
The bank also continues to offer attractive benefits to older customers—50 basis points extra for senior citizens and 80 basis points for super senior citizens.
Why This Rate Trend Matters to You in 2025
The RBI’s decision to reduce the repo rate often triggers a domino effect across the banking sector, leading to lower lending and deposit rates. In April 2025, we are witnessing a rapid transmission of this monetary change into retail banking.
Fixed deposits have traditionally been a safe haven for conservative investors, particularly retirees and those seeking assured returns. However, with rates trending downward, it is crucial to reassess financial strategies. Experts suggest looking into:
- Short-duration debt mutual funds
- Government-backed savings schemes
- Special high-yield corporate FDs (with caution)
Staying updated on rate movements can help investors maximize returns while managing risk.
Conclusion
The April 2025 round of FD interest rate cuts is a clear reflection of the RBI’s accommodative stance to support economic expansion. While it may benefit borrowers through cheaper loans, depositors need to navigate a more complex landscape for income generation.
Reviewing your FD portfolio and considering alternative investment avenues could prove beneficial in maintaining financial stability amid falling rates.
FAQ
What triggered the FD rate cuts in April 2025?
The Reserve Bank of India reduced the repo rate by 25 basis points to 6%, prompting banks to adjust their FD rates accordingly to reflect the lower cost of funds.
Which bank offers the highest FD rate in April 2025?
As of April 16, 2025, Punjab National Bank offers the highest FD interest rate at 7.10% for its 390-day tenure. Canara Bank follows closely with a 7.25% rate for its 444-day FD.
Are senior citizens still getting better FD rates?
Yes, most banks including SBI and Canara Bank continue to offer additional interest (ranging from 50 to 80 basis points) to senior and super senior citizens on fixed deposits.
Is it a good time to invest in FDs now?
FDs still provide stable returns, but investors should consider diversifying into short-term debt funds or other savings instruments for potentially better yields as interest rates decline.
Have all banks cut FD rates?
Not all banks have disclosed full rate updates yet, but most major public and private sector banks, including SBI, HDFC, BOI, and Yes Bank, have reduced rates in response to RBI’s monetary policy.
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