In a move reflecting the Reserve Bank of India’s latest policy stance, the State Bank of India (SBI) has reduced interest rates on both savings accounts and fixed deposits (FDs), effective from June 15, 2025. This rate revision is expected to impact millions of depositors across the country, as banks realign with softer monetary cues from the central bank.
SBI has cut its savings account interest rate by 5 basis points (bps), bringing it down to 2.65% per annum. The cut applies across all balance tiers, affecting all customers uniformly. This move mirrors a broader trend among banks to reduce deposit rates amid declining repo rates.
On the fixed deposit front, the adjustments are more varied. SBI has reduced FD interest rates between 5 to 75 bps for deposits below ₹3 crore, depending on tenure. For instance, the rate for short-term deposits of 7 to 45 days now stands at 3.00%, down from 3.50%. Longer tenures between two to three years now yield 6.50%, while shorter-term options have also seen noticeable drops.
One of the major updates is the withdrawal of the 'Amrit Kalash' special FD scheme. Known for offering higher interest 7.10% for regular depositors and 7.60% for senior citizens the scheme has been discontinued. With its exit, senior citizen FD rates now cap at 7.00%, offering 50 bps above the general rates as per standard SBI policy.
The rate revisions follow RBI’s recent 50 bps rate cut, which has led to a ripple effect across India’s banking sector. ICICI Bank, among others, also adjusted its FD rates in a similar timeframe, suggesting a uniform industry response. As the monetary environment turns more accommodative, analysts expect more banks to follow suit, both in lending and deposit rate structures.
The changes underscore the interconnectedness of RBI’s monetary decisions and commercial banks’ interest rate frameworks. For depositors, especially senior citizens and conservative savers, this shift may encourage exploring alternative investment avenues such as debt mutual funds or hybrid options offering more stable returns in the current low-rate regime.
With these new rates in place, customers are encouraged to review their investment strategies, particularly if reliant on FD income. As India’s financial ecosystem adapts to central policy directions, staying informed on rate trends becomes crucial for managing savings efficiently.
