FD interest rate up to 9.10%: These banks are still offering over 8% interest on fixed deposits for senior citizens Banks will likely lower FD rates, creating a limited window to secure higher returns
Fixed deposit (FD) investors will soon start to feel the impact of the Reserve Bank of India's (RBI) third repo rate cut in 2025. On June 6, the RBI’s Monetary Policy Committee (MPC) announced a 50 basis point reduction, bringing down the repo rate to 5.5%. As a result, banks will start reducing their fixed deposit interest rates in response to the lower cost of borrowing. This trend spells concern for conservative investors who rely heavily on FDs for steady and secure returns. Investors are now faced with a narrowing window to lock in higher interest rates, as further cuts or rate stagnation could lead to even lower FD returns in the near future.Also read: New FD rates from June 1, 2025: PNB, Canara Bank revise interest rates across tenures
FD rates may decline soon
A downward trend is anticipated in the upcoming months, even though it might take some time for the effects of the repo rate cuts to take effect in retail deposit rates. This implies that, particularly for senior citizens, who usually receive interest above regular rates, the current FD interest rates may be among the highest available for some time.Axis Bank revises ATM transaction fees effective July 1, 2025: Check revised charges
Lock in high FD rates
Many banks are still offering attractive FD rates. For senior citizens, some banks continue to provide interest rates of 8% or more, making this a crucial opportunity to lock in higher returns before further rate revisions kick in.| Bank Name | Interest Rates (p.a.) | |
| Highest slab | ||
| % | Tenure | |
| SMALL FINANCE BANKS | ||
| AU Small Finance Bank | 8.25 | 18 months |
| Equitas Small Finance Bank | 8.55 | 888 days |
| ESAF Small Finance Bank | 8.25 | 444 days |
| Jana Small Finance Bank | 8.55 | Above 1 year to 3 years |
| NorthEast Small Finance Bank | 9.00 | 18 months 1 day to 18 months 2 days |
| Suryoday Small Finance Bank | 8.80 | Above 30 months to 3 years |
| Ujjivan Small Finance Bank | 8.55 | 18 months |
| Unity Small Finance Bank | 9.10 | 1001 days |
| Utkarsh Small Finance Bank | 8.75 | 2 years to 3 years |
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How safe are Small Finance Banks?
According to the AU Small Finance Bank website, “Like other types of banks in India, the RBI regulates and governs SFBs. Therefore, all the banking norms, such as Statutory Liquidity Ratio Requirements, Cash Ratio Reserve Requirements, etc., apply to them. Moreover, the RBI also defines aspects like Eligibility Criteria and Mandatory Promoter Contribution for SFBs. In other words, there are stringent regulations that SFBs must adhere to for their operations. As the RBI regulates the segment, SFBs are as safe as any other type of bank.”
Are small finance banks covered under DICGC?
Yes, small finance banks are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC). Under this, each depositor in a bank is insured up to a maximum of Rs 5,00,000 for both principal and interest amount held by the investor.This story originally appeared on: India Times - Author:Faqs of Insurances
