FD rate cuts: HDFC, Bandhan, YES Bank revise rates; SBI ends special scheme

Fixed deposit (FD) investors who have enjoyed high returns over the past few years are now seeing banks start to trim rates. HDFC Bank, India’s largest private lender, has cut interest rates on select fixed deposit tenures below ₹3 crore, with the revised rates coming into effect from April 1, 2025.

 

State Bank of India (SBI) has also withdrawn its special deposit scheme, Amrit Kalash, which had offered 7.10 per cent interest for a 400-day tenure. Introduced in April 2023, the scheme ended on March 31.

 

The new financial year hasn’t begun favourably for depositors. Ahead of the Reserve Bank of India’s (RBI) monetary policy committee (MPC) meeting next week, three private sector banks — HDFC Bank, Yes Bank, and Bandhan Bank — have revised their FD rates. This follows the RBI’s move to cut the repo rate by 0.25 per cent in February 2025, its first reduction in nearly five years.

 

Markets and economists now expect the central bank to lower the repo rate again during the MPC meeting scheduled for April 7–9.

 

“Consensus among economists seems to be building that the repo could be slashed multiple times in 2025, with some saying that the cuts could be as much as 100 bps this year. The complexities of trade tariffs may impact growth globally, which may prompt policy actions. Inflation has also eased, which should anyway provide opportunities for rate cuts,” said Adhil Shetty, CEO of Bankbazaar.com.

 

HDFC Bank FD rates

 

HDFC Bank has reduced interest rates on two specific tenures:

< 35 basis points cut for deposits of 35 months (2 years and 11 months)

< 40 basis points cut for deposits of 55 months (4 years and 7 months)

 

Both tenures now fetch 7 per cent interest. Senior citizens will continue to receive an additional 0.5 per cent. These rates apply to deposits below ₹3 crore.

 

The lender had previously offered 7.35 per cent and 7.40 per cent respectively for these tenures under its special FD scheme launched in July 2024.

 

The highest rate currently offered by HDFC Bank is 7.25 per cent for a tenure of up to 21 months. For longer tenures, the rate drops to 7 per cent.

 

Yes Bank FD rates

 

Yes Bank has lowered its interest rates by 0.25 per cent on certain tenures. It now offers:

< 7.75 per cent for fixed deposits between 12 months and 24 months  

(down from 8 per cent earlier)

 

Bandhan Bank FD rates

 

Bandhan Bank revised its rates for bulk deposits over ₹3 crore from April 3, 2025. The bank now offers:

< 8 per cent for callable bulk deposits of 12 months and 12 months plus 1 day to under 13 months  

< Up to 8.3 per cent for non-callable bulk deposits of the same tenure

 

The recent round of rate cuts comes nearly two months after the RBI’s MPC reduced the policy rate. Despite that move, many banks had delayed trimming deposit rates due to pressure around deposit mobilisation.

 

“Lending rates on fresh rupee loans have increased. We believe that the transmission of the Feb 2025–25 bps rate cut is yet to take place as year-end deposit cost pressures exist,” said Suresh Ganapathy of Macquarie Capital in a report published in Business Standard.

 

Is the time ripe for investors to lock in their rates?

 

Yes, they should.

 

“It would be prudent for investors to lock in fixed deposits now, especially as banks begin to cut interest rates. Our view on FDs remains unchanged since rates peaked a few quarters ago. With consensus pointing to a downward trend in rates throughout 2025, this is an opportune time for depositors to secure current premium rates. We particularly recommend considering special tenors between 365 and 730 days for short-term savings needs. Locking in now helps protect your returns before rates fall further, making it a sensible strategy for conservative investors seeking stable income,” said Shetty.