SBI Slashes Fixed Deposit Interest Rates: What It Means for Customers and Investors

New rates effective April 15; Special schemes updated for senior citizens SBI Cuts FD Interest Rates by 0.20% Amid Market Shift

In a surprising move, the State Bank of India (SBI) has reduced its fixed deposit (FD) interest rates by 0.20%, sending shockwaves among retail investors and depositors. As of April 15, the interest rate for a 1-year FD will drop from 6.90% to 6.70% annually. This comes shortly after similar actions by Canara Bank and Kotak Mahindra Bank, both of which recently slashed FD rates following the RBI’s repo rate cut.

This trend indicates a broader shift in India’s monetary environment, urging savers to re-evaluate their fixed income strategies.

New Rates for SBI’s ‘Amrit Vrishti’ Special FD Scheme

SBI has also announced revised interest rates under its ‘Amrit Vrishti’ special deposit scheme, which is designed to offer competitive returns for specific tenures.

• General citizens will now receive 7.05% interest on FDs for 444 days.

• Senior citizens will enjoy a rate of 7.55%.

• Super senior citizens are eligible for a higher return of 7.65%.

These adjustments aim to balance the bank’s offerings amid shifting financial dynamics while still providing incentives for long-term savers.

‘WeCare’ Scheme Still Benefits Senior Citizens

Despite the rate reduction, SBI continues to offer benefits to senior citizens through its ‘WeCare’ special FD scheme. This program provides:

• An additional 0.50% interest for senior citizens on term deposits less than 5 years.

• A 1% premium on FDs of 5 years or more, giving senior citizens an effective return of 7.50%, compared to 6.50% for regular customers.

This makes the ‘WeCare’ scheme a compelling option for retirees seeking stable and safe returns in a low-interest-rate environment.

Canara Bank and Kotak Follow Suit

SBI isn’t alone in revising FD interest rates. Canara Bank now offers:

• 6.85% on 1-year FDs

• 7.15% for 2 years, 7.20% for 3 years, and 6.70% for 5 years

• A competitive 7.25% interest rate on 444-day deposits

These adjustments are in line with a broader industry response to monetary policy changes and suggest a downward trend in fixed income returns across major Indian banks.