State Bank of India (SBI), the country’s largest lender, has revised its fixed deposit (FD) interest rates downward for select short-term maturities. Following the Reserve Bank of India’s recent monetary policy stance, SBI reduced deposit rates maturing between one and two years, impacting the returns for retail and senior citizen customers alike.
New FD Rates Effective from April 15, 2025
According to SBI’s official communication, the bank has trimmed FD rates by 10 basis points (0.10%):
| Tenure | Previous Rate | New Rate |
|---|---|---|
| 1-2 years (Regular customers) | 6.80% | 6.70% |
| 2-3 years (Regular customers) | 7.00% | 6.90% |
| 1-2 years (Senior citizens) | 7.30% | 7.20% |
| 2-3 years (Senior citizens) | 7.50% | 7.40% |
(Rates apply for deposits below ₹3 crore.)
How Much Does It Impact Returns?
For a ₹5 lakh fixed deposit, here’s how the earnings have shifted:
1-Year Deposit
- Regular Customers:
- Old Maturity Amount: ₹5,34,876
- New Maturity Amount: ₹5,34,351
- Difference: ₹525 less income
- Senior Citizens:
- Old Maturity Amount: ₹5,37,511
- New Maturity Amount: ₹5,36,983
- Difference: ₹528 less income
2-Year Deposit
- Regular Customers:
- Old Maturity Amount: ₹5,74,440
- New Maturity Amount: ₹5,73,312
- Difference: ₹1,128 less income
- Senior Citizens:
- Old Maturity Amount: ₹5,80,110
- New Maturity Amount: ₹5,78,972
- Difference: ₹1,138 less income
Expert Advice for FD Investors
Experts advise that investors aiming for safe returns should still consider FDS as a portfolio component. However, he cautions on checking two key aspects:
- Premature Withdrawal Penalties: Exiting early can invite penalties, reducing overall returns.
- Interest Payout Options: Customers should be aware whether interest is cumulative (paid at maturity) or non-cumulative (paid periodically).
Jain also recommends evaluating a bank’s financial health and comparing FD rates across institutions before committing.
Tax Angle to Remember
Investors should note:
- Interest earned on FDs is taxable.
- Tax-saving FDs (5-year tenure) offer deductions up to ₹1.5 lakh under Section 80C.
Quick View: Impact of New SBI FD Rates
Here’s a visual snapshot for ₹5 lakh FD returns:
| Customer Type | Tenure | Return Before Cut | Return After Cut | Loss (₹) |
|---|---|---|---|---|
| Regular | 1 year | ₹5,34,876 | ₹5,34,351 | ₹525 |
| Senior Citizen | 1 year | ₹5,37,511 | ₹5,36,983 | ₹528 |
| Regular | 2 years | ₹5,74,440 | ₹5,73,312 | ₹1,128 |
| Senior Citizen | 2 years | ₹5,80,110 | ₹5,78,972 | ₹1,138 |
Although the cut is marginal, depositors should stay alert to such changes, especially when planning for medium-term financial goals through fixed deposits.
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