Banks cut FD rate yet again
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Come August, and your fixed deposits or FDs will fetch lower interest rates. Many banks such as SBI, HDFC and Bank of Baroda have recently cut their interest rate on fixed deposit effective from 1st August.
The biggest bank in the country SBI will reduce rates on long tenured FD of up to 20 basis points (bps). One basis point is equivalent to 0.01% or 1/100th of a percent. For deposits of up to 179 days, SBI has cut the deposit rates by 50-75 bps. This cut in the fixed deposits rate may result in a cut in their lending rates. This means that loans are likely to get cheaper.
Here’s a brief roundup of the recent rate cuts carried by different banks and what are they currently offering across the different tenures. The interest rate mentioned here is for deposits of less than Rs.2 crores.
Kotak Mahindra Bank revised their interest rate on 20th July. Kotak Bank offers the best FD interest rate of 7.00% on fixed deposits from 364 Days to less than 3 years. On deposits maturing between 181 days to 270 days, Kotak Mahindra Bank is offering an interest rate of 6.50%. The deposits of 271 days to 363 Days, it offers 6.75%.
| Tenure | Interest Rate |
| 7 – 14 Days | 3.50% |
| 15 – 30 Days | 4.00% |
| 31 – 45 Days | 5.00% |
| 46 – 90 Days | 5.50% |
| 91 – 120 Days | 6.00% |
| 121 – 179 days | 6.25% |
| 180 Days | 6.40% |
| 181 Days to 269 Days | 6.50% |
| 270 Days | 6.50% |
| 271 Days to 363 Days | 6.75% |
| 364 Days | 7.00% |
| 365 Days to 389 Days | 7.00% |
| 390 Days (12 months 25 days) | 7.00% |
| 391 Days – Less than 23 Months | 7.00% |
| 23 Months | 7.00% |
| 23 months 1 Day- less than 2 years | 7.00% |
| 2 years- less than 3 years | 7.00% |
| 3 years and above but less than 4 years | 6.90% |
| 4 years and above but less than 5 years | 6.75% |
| 4 years and above but less than 5 years | 6.50% |
HDFC Bank revised their deposit rate effective from 22nd July. For FDs maturing in 46 days to 6 months, it offers an interest rate of 6%. HDFC Bank is offering interest at the rate of 7.10% on FD maturity at 1 year. Currently, they are offering best fixed interest rate of up to 7.30%. Here is the snapshot of their current rates.
| Period | Interest Rate |
| 7 – 14 days | 3.50% |
| 7 – 14 days | 4.25% |
| 30 – 45 days | 5.50% |
| 46 days – 6 months | 6.00% |
| 6 mnths 1 day – 9 months | 6.50% |
| 9 mnths 1 day- <1 year | 6.75% |
| 1 year – 1 Year 16 days | 7.10% |
| 1 year 17 days – 2 Years | 7.20% |
| 2 years 1day – 3 Years | 7.30% |
| 3 years 1day – 5 years | 7.25% |
| 5 Years 1 Day – 10 Years | 7.00% |
FD interest rates in PNB range from 5.50% p.a. to 6.75% p.a. for FDs maturing between 7 days to less than a year. These deposits are known as short term deposits as they have tenure of less than 1 year. It provides the highest interest rate of 6.85% for FDs of 444 days and 555 days.
| Tenure | Interest Rate |
| 7 to 14 days | 5.5 |
| 15 to 29days | 5.5 |
| 30 to 45 days | 5.5 |
| 46 to 90 days | 6.25 |
| 91 to 179 days | 6.25 |
| 180 days to 270 Days | 6.25 |
| 271 days to less than 1 year | 6.5 |
| 333 days | 6.75 |
| 1 year | 6.8 |
| 444 days | 6.85 |
| 555 days | 6.85 |
| above 1 year & upto 3 years | 6.75 |
| above 3 year & upto 5 years | 6.25 |
| above 5 years & upto 10 years | 6.25 |
Axis Bank gives interest rate of up to 6% on their FD up to 6 months and 6.75% on their FDs less than a year. For fixed deposits maturing between 3 years and less than 5 years, the interest rate is 7.25%. Axis Bank offers best FD rate of 7.30% on fixed deposits of 2 years to 2 years 364 days.
| Tenure | Interest Rate |
| 7 to 14 days | 3.5 |
| 15 to 29days | 3.5 |
| 30 to 45 days | 5.5 |
| 46 to 60 days | 6 |
| 61 days < 3 months | 6 |
| 3 months < 4 months | 6 |
| 4 months < 5 months | 6 |
| 5 months < 6 months | 6 |
| 6 months < 7 months | 6.5 |
| 7 months < 8 months | 6.5 |
| 8 months < 9 months | 6.5 |
| 9 months < 10 months | 6.75 |
| 9 months < 10 months | 6.75 |
| 11 months < 1 year | 6.75 |
| 1 year < 1 year 5 days | 7.1 |
| 1 year 5 days < 1 year 11 days | 7.1 |
| 1 year 11 days < 1 year 25 days | 7.1 |
| 1 year 11 days < 1 year 25 days | 7.20 |
| 13 months < 14 months | 7.20 |
| 14 months < 15 months | 7.20 |
| 15 months < 16 months | 7.20 |
| 16 months < 17 months | 7.20 |
| 17 months < 18 months | 7.20 |
| 18 Months < 2 years | 7.20 |
| 2 years < 30 months | 7.30 |
| 30 months < 3 years | 7.30 |
| 3 years < 5 years | 7.25 |
| 5 years to 10 years | 7.00 |
The cut in the interest rates is on the back of repo rate cuts by the Reserve Bank of India(RBI). RBI has cut the interest rates by 75 bps since January 2019. As a result, banks have passed the rate cut to their depositors. Fixed deposit is the most favourable saving options for many individuals’ especially senior citizens and investors who can’t take risk. The rate cut is a big blow to the senior citizens who solely rely on FDs.
This means that the FD depositors will now have to look for different options to get attractive interest rate. In the next article, we will see some of the ways to manoeuvre through the lowering interest rate.
Data as on 31st July, 2019
Tags: time deposits, FD, fixed deposit, fd interest rate, term deposits