Taking advantage of the surge in deposits following demonetisation, several banks including ICICI Bank, HDFC Bank and Canara slashed their FD rates by up to 1 per cent.
United Bank said the new deposit rates will be applicable from November 18.
Canara Bank announced lowering its deposit rates in the range of 0.05-0.25 per cent.
The lowering in fixed deposit rates may herald reduction in lending rate as well in the next few days.
For fixed deposit between 390 days to 2 years, ICICI Bank and HDFC Bank have lowered the interest rate by 0.15 per cent effective yesterday, according to information available on ICICI Bank website.
ICICI Bank will pay 7.10 per cent as against 7.25 per cent earlier.
HDFC Bank has reduced interest rate by 0.25 per cent across all tenures on bulk deposits ranging between Rs 1-5 crore. The new rates are effective today, HDFC Bank said.
With the revised interest rates, the one-year fixed deposit will attract an interest rate of 6.75 per cent as against the 7 per cent earlier.
For fixed deposits between '3 years 1 day-5 years', the rate has been lowered to 6.5 per cent from 6.75 per cent.
Public lender Canara Bank said: "The bank has revised deposit interest rates in different maturities in retail and bulk deposits in the range of 5 bps (0.05 per cent) to 25 bps (0.25 per cent)."
The lender said these rates are effective November 21.
The other state-owned United Bank of India has trimmed deposit rates in the range of 0.25 per cent to 1 per cent for deposits up to Rs 1 crore for maturity buckets of 46 days to 1 year.
Likewise, the bank has also cut rates by similar margin for deposits above Rs 1 crore and Rs 5 crore for the same maturity bucket.
Yesterday, the country's largest lender SBI had slashed fixed deposit rates on select maturities by up to 0.15 per cent.
Private lender Axis Bank has cut marginal cost of fund-based lending rate (MCLR) by 0.15-0.20 per cent.
Till yesterday, SBI collected Rs 1,14,139 crore in deposits over the last seven days after the government announced its decision to scrap Rs 500 and Rs 1,000 notes.
According to estimates, banks have collected cash deposit of over Rs 4 lakh crore following the demonetisation decision announced on November 8 by Prime Minister Narendra Modi.