If you are thinking of investing in a fixed deposit (FD) in a bank, then there may be a matter of concern for you in 2025. There are reports that the interest rates on bank FDs may fall this year. The reason for this is the monetary policy of the Reserve Bank of India (RBI), under which the repo rate is being continuously reduced. Due to this, banks have also started reducing FD interest rates. So let’s know what impact it will have on your investment and which banks have already changed the interest rates.
HDFC Bank has cut interest rates by 20 basis points i.e. 0.20 percent. Let us tell you that the largest private bank has made this change for FDs of less than Rs 3 crore. The new interest rates of the bank will be applicable from May 23, 2025. Earlier, HDFC Bank had also cut FD rates by 50 basis points in April 2025.
HDFC Bank Reduced The Interest Rates On Fixed Deposit
After State Bank of India (SBI), now HDFC Bank has also reduced the interest rates on fixed deposits i.e. FD. As per the new interest rates, now general citizens will get interest at the rate of 6.50% on FD for 1 year. At the same time, 6.70% annual interest will be given on 2-year FD, 6.55% on 3-year FD and 6.30% on 5-year FD. The bank is giving interest up to 7.35% to senior citizens.
Interest Rates Offered by SBI Bank 6.50% Interest In 1 Year FD
SBI (State Bank of India) first reduced the interest rates on its FDs on April 15 and then reduced it further from May 16. SBI has reduced the interest rate on its short-term FD deposits from 3.5% to 3.3%, while the interest rate on long-term FDs has come down from 6.9% to 6.7%. This means that if you are thinking of investing in FD in SBI, then you will not get as good returns as before.
Canara Bank Reduced 6.85% Interest On 1 Year FD
Canara Bank has also reduced the interest rates of fixed deposits i.e. FD. According to the new interest rates, now general citizens will get interest at the rate of 6.85% on FD for 1 year.
At the same time, 6.90% annual interest will be given on 2 year FD, 7.00% on 3 year FD and 6.70% on 5 year FD.
Other Banks Also Reduced Interest Rates
Big banks like HDFC Bank and ICICI Bank have also reduced their FD interest rates. HDFC Bank has cut up to 50 basis points on FDs of select periods. Now HDFC Bank is offering 3% to 7.1% interest to general customers and 3.5% to 7.55% interest to senior citizens. ICICI Bank has also reduced the rate by 50 basis points and is now offering 3% to 7.05% interest.
Interest Rate Of Special Scheme ‘Amrit Vrishti’ Also Reduced
Interest rates have also been reduced in the special scheme ‘Amrit Vrishti’ for senior citizens. Earlier under this scheme, you used to get 7.05% interest for a period of 444 days, which has now come down to 6.85% (FD Rates Hike). Apart from this, the interest rate which was earlier 7.55% for senior citizens has now come down to 7.35%. In this way, this can be a bad change for senior citizens, as they are already getting less interest.
Keep These 3 Things In Mind While Making FD
- It is important to choose the right tenure Before investing in FD, it is important to think about its tenure. This is because if investors withdraw before maturity, they will have to pay a penalty. Breaking the FD before it matures will attract a penalty of up to 1%. This can reduce the total interest earned on the deposit.
- Do not invest all the money in a single FD If you are planning to invest Rs 10 lakh in FD in a single bank, then instead invest in 8 FDs of Rs 1 lakh and 4 FDs of Rs 50 thousand in more than one bank. This will allow you to break the FD in between and arrange for money if you need money in between. Your remaining FDs will remain safe.
- Tax exemption is available on 5-year FD. 5-year FD is called tax saving FD. By investing in it, you can claim a deduction of Rs 1.5 lakh from your total income under Section 80C of the Income Tax Act. In simple language, you can reduce your total taxable income by up to Rs 1.5 lakh through Section 80C.
Conclusion
If you were also thinking of investing in bank FD, then you should think in advance about the interest rates you will get in 2025. Due to the reduction in repo rate and reduction in interest rates by banks, you will no longer be able to get the same returns as before. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
