Should you lock your FD before banks cut their interest rates? These 6 lenders offer highest rates on fixed deposits

With repo rate declining to 5.50 percent after RBI’s monetary policy committee (MPC) cut the repo rate for the third consecutive time on June 6, banks have followed suit. A number of bankss have already slashed their lending rate after RBI’s rate cut.

Not only lending rates, even the fixed deposit (FD) interest rates are also set to move southward in the wake of repo rate cut. Consequently, depositors are recommended to lock their savings into fixed deposits (FD) before the rates are cut again.

So, if you are exploring the idea of opening a fixed deposit, you may check the interest rates offered by top banks both private and state. 

“There may be one more cut of 25 basis point in next 6 months and so which will lead to further reduction in FD interest rate. So if you need money for your short term goals of 1 to 3 years and make the FD as soon as possible. But make a note that putting more money in FD blocks your money at the lower rate,” says Preeti Zende, founder of Apna Dhan Financial Services.

Highest interest rates by state and private lenders:

I. State Bank of India (SBI): SBI’s highest interest rate of 6.7 percent is offered on a deposit with two to three-year tenure. On one-year tenure, it offers 6.5 percent interest. These rates came into force on May 16, 2025.

II. HDFC Bank: HDFC Bank offers highest interest rate of 6.85 percent per annum to general citizens on a fixed deposit tenure of 15-21 months. Senior Citizens are entitled to receive an extra 50 basis points. These rates came into force on May 23, 2025.

III. ICICI Bank: ICICI Bank offers highest interest of 6.6 percent to general citizens on a tenure of 2-5 years. Senior citizens are entitled to receive 7.1 percent per annum.

IV. Union Bank of India: Union Bank offers highest rate of 7.15 percent per annum on a tenure of 456 days. These rates came into force on April 25, 2025.

V. Bank of Baroda (BOB): Bank of Baroda offers highest interest rate of 7 percent on the deposit of 444 days (BOB Square Drive Deposit Scheme) to general citizens. Senior citizens are entitled to receive an extra 50 basis points. These rates came into force on May 29, 2025.

VI. Kotak Mahindra Bank: Kotak Mahindra Bank revised its interest rates and now the highest interest rate of 6.6 percent is offered on a tenure of 391 days to 23 months to general citizens and an extra 50 basis points to senior citizens.

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