FD rates drop as Indian banks adjust to global trends
What's the story
Several banks in India have recently slashed their fixed deposit (FD) interest rates across different tenures. The trend comes amid domestic and global rate cuts, including the US Federal Reserve's recent 25 basis points (bps) reduction to 4.00-4.25%. The move could prompt further easing by the Reserve Bank of India (RBI). Currently, most major banks offer FD rates between 6.45% and 6.7% per annum for regular depositors.
Rate variations
Bandhan Bank offers highest rate of 7.2% for regular depositors
Senior citizens usually get an additional 50bps on FD rates. However, small finance banks still offer some of the highest rates, often going up to 8% or more. Bandhan Bank offers the highest FD rate of 7.2% for a tenure between two years and less than three years. HDFC Bank and Kotak Mahindra Bank offer similar rates for regular depositors for specific tenures, such as 18-21 months for HDFC and 391 days to 23 months for Kotak Mahindra.
Banking updates
ICICI, Federal, and DCB banks provide similar rates
ICICI Bank offers an FD rate of 6.6% for regular citizens and 7.1% for senior citizens for tenures of two years and above. Federal Bank offers a rate of 6.7% for regular depositors and 7.2% for senior citizens, but only up to a tenure of 999 days. DCB Bank also offers the highest FD rate of 7.2% for a tenure of 27 months at present.
Interest offerings
SBI offers an FD rate of 6.45% for regular depositors
Jammu and Kashmir Bank offers an FD rate of 7.1% for a tenure of 888 days, while SBM Bank India offers the highest rate of 7.5% for five years at present. Among public sector banks, State Bank of India (SBI) offers an FD rate of 6.45% for regular depositors and 6.95% for senior citizens for two to three years at present.
Rate comparison
PNB, Union Bank also provides competitive FD rates
Other public sector banks like Punjab National Bank, Union Bank of India, Indian Overseas Bank, Indian Bank, and Central Bank of India also offer competitive FD rates. PNB offers an interest rate of 6.6% for regular depositors and 7.1% for senior citizens for a tenure of 390 days, while Union Bank offers similar rates but for a longer tenure up to three years at present.
Finance options
Jana Small Finance Bank offers highest rate of 8%
Among small finance banks, ESAF Small Finance Bank offers the highest FD rate of 7.6% for a tenure of 444 days. Slice Small Finance Bank offers the highest rate of 7.75% for 18 months 1 day to 18 months 2 days, and Jana Small Finance Bank offers a highest rate of 8% for 5 years at present.