Key Highlights
- SBI cuts FD interest rates by 10 basis points for tenures of 1 to 3 years, effective April 15, 2025.
- The Amrit Vrishti FD scheme has been reintroduced with a revised interest rate of 7.05% for general customers and 7.55% for senior citizens for a tenure of 444 days.
- Senior citizens face a reduction in FD rates for select tenures, with rates now ranging between 4% and 7.50%.
- The changes follow the Reserve Bank of India’s recent repo rate cut by 25 basis points to 6%.
New Delhi: State Bank of India (SBI), the country’s largest public sector bank, has announced a reduction in fixed deposit (FD) interest rates for select tenures, effective April 15, 2025. This move comes shortly after the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points earlier this month.
Revised FD Rates:
- For deposits maturing between 1 to less than 2 years, the interest rate has been reduced from 6.80% to 6.70% for general customers and from 7.30% to 7.20% for senior citizens.
- For deposits maturing between 2 to less than 3 years, the rate is now 6.90% (down from 7%) for general customers and 7.40% (down from 7.50%) for senior citizens.
Deposits with shorter tenures (up to one year) and longer-term deposits (3 years or more) remain unaffected.
Amrit Vrishti Scheme Relaunched with Lower Returns
Alongside the rate cuts, SBI has reintroduced its popular Amrit Vrishti FD scheme, which offers slightly better returns than regular FDs but at lower rates compared to its previous iteration.
Key Features of Amrit Vrishti Scheme:
- Tenure: Fixed at 444 days.
- Interest Rate:
- General customers: 7.05% per annum (previously 7.25%).
- Senior citizens: 7.55% per annum (previously 7.75%).
- Super senior citizens: 7.65% per annum.
- Available through SBI branches, internet banking, and the YONO app.
The scheme is designed for both new and renewal deposits under ₹3 crore and offers flexibility in interest payouts (monthly, quarterly, or on maturity). However, penalties apply for premature withdrawals.
Impact on Senior Citizens
Senior citizens, who rely heavily on FD interest income, will feel the pinch of these reductions:
- The highest slab rate for senior citizens is now capped at 7.50%, applicable to deposits maturing in 5 to 10 years.
- For shorter tenures like 1 to less than 2 years, rates have dropped from 7.30% to 7.20%, while for 2 to less than 3 years, they are now at 7.40%, down from 7.50%.
Despite these cuts, the Amrit Vrishti scheme continues to offer competitive rates for senior citizens compared to regular FDs.
Why Are FD Rates Being Reduced?
The reduction in FD rates is closely tied to the RBI’s monetary policy adjustments:
- The RBI recently cut the repo rate by another 25 basis points, bringing it down to 6%, as part of its accommodative stance to boost economic growth.
- Lower repo rates reduce borrowing costs for banks but often lead to reduced deposit rates as well.
This trend reflects a broader shift among banks toward lowering deposit rates following monetary easing by the RBI.
Comparison of Regular FD vs Amrit Vrishti Scheme
| Feature | Regular FD (1–3 Years) | Amrit Vrishti Scheme |
|---|---|---|
| Tenure | Flexible | Fixed at 444 days |
| Interest Rate (General) | Up to 6.90% | 7.05% |
| Interest Rate (Senior Citizens) | Up to 7.40% | 7.55% |
| Premature Withdrawal | Penalty applies | Penalty applies |
How This Affects Depositors
For general customers and senior citizens alike, these changes mean slightly lower returns on medium-term fixed deposits but an opportunity to lock in higher-than-average returns through schemes like Amrit Vrishti.
Financial experts suggest that depositors looking for stable returns should consider locking funds into such special schemes before further rate adjustments occur.
Balancing Returns Amid Rate Cuts
While SBI’s revised FD rates reflect broader economic trends following RBI’s monetary easing, schemes like Amrit Vrishti continue to provide competitive options for depositors seeking secure investments with decent returns.
Depositors are advised to review their financial goals and choose tenures wisely to maximize returns amidst changing interest rate dynamics!
