Has Your Bank Cut Lending and Deposit Rates? Check Here!

In response to the RBI’s 50-basis point (bp) cut in the repo rate in 2025, major banks in India have announced reductions in their lending and deposit interest rates. This move is aimed at promoting economic growth and easing financial costs for consumers.  

HDFC Bank and SBI Revise Deposit Rates 

HDFC Bank, the largest private sector lender, has reduced its savings deposit rates by 25bp. Effective from April 12, 2025, savings accounts with balances under ₹50 lakh will now earn an interest rate of 2.75%, while those with balances exceeding ₹50 lakh will accrue 3.25%.  

At 2:08 PM, HDFC Bank share price was up 3.39% and was trading at ₹1,868.00.  

State Bank of India has also revised its fixed deposit interest rates for senior citizens. FDs with a tenure of 1-3 years will now offer a 20bp reduction. FDs with a 1–2-year term will now yield 7.2% (down from 7.3%), and those with a 2–3-year tenure will earn 7.4% (down from 7.5%). These new rates will take effect from April 15, 2025. 

At 2:09 PM, SBI share price was up 1.52% and was trading at ₹765.30. 

Bank of India Cuts Fixed Deposit Rates 

Bank of India has also revised its FD interest rates for deposits below ₹3 crore. For deposits maturing between 91 days and 179 days, the bank will offer 4.25%, while deposits between 180 days to 1 year will earn 5.75%. For deposits of 1 year, the interest rate will be 7.05%, and for those between 1-2 years, the rate will be 6.75%. 

For larger deposits, ranging from ₹3 crore to ₹10 crore, the bank has announced rates as high as 6.50% for deposits maturing in 211 days to less than one year. 

At 2:11 PM, Bank of India share price was up 2.63% and was trading at ₹111.  

Lending Rates Also Reduced 

In addition to the deposit rate cuts, banks have also slashed their lending rates. SBI has reduced its repo rate-linked lending rates by 25bp to 8.25%, while its external benchmark lending rates have been adjusted to 8.65%. Bank of Maharashtra has followed suit by reducing its external benchmark lending rates to 8.65% as well. 

Impact of RBI’s Repo Rate Cut 

The recent changes in the interest rates come after the RBI’s reduction in the repo rate to 6% from 6.5%. This move follows two consecutive cuts, with the central bank citing retail inflation being well within the target range of 4%.  

The objective of RBI is to boost consumer demand and spending, especially as the the bank and India’s Finance Ministry have noted that more households are turning to market-based investment instruments like mutual funds instead of traditional bank savings. 

Conclusion 

The cuts in lending and deposit rates by major banks are expected to make borrowing cheaper and savings less lucrative. While these changes aim to stimulate the economy, they may also push consumers toward more market-based investments. 

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