FD Rates To Fall After Repo Rate Cut: SBI To HDFC Bank, Check Latest Fixed Deposit Rates

The Reserve Bank of India announced a repo rate cut of 50 basis points on Friday, June 6, after its Monetary Policy Committee (MPC) meeting. This is the third consecutive cut in the key lending rate by the Central Bank. The repo rate now stands at 5.5%.

For the banks, the repo rate serves as a benchmark for fixing the interest rates on different financial instruments, such as personal loans and fixed deposits (FDs). When borrowing is more expensive for banks due to a high repo rate, the lenders increase the interest rate on FDs to attract more investments. When the rate is low, the reverse happens.

With the RBI lowering the repo rate, many banks are expected to announce a cut in their interest rates. This means that people with term deposits will get a lower return on their investments. On the other hand, for home loan borrowers, the rate cut brings in some cheer since the interest rates are expected to be revised downwards by top lenders following the RBI’s decision.

Many banks across both the public and private sectors had revised the FD rates following two successive rate cuts by the RBI in February and April. According to an SBI research report, banks reduced FD rates by 30-70 bps since February 2025.

Ahead of the RBI’s June monetary policy review, Canara Bank and Punjab National Bank had revised their interest rate on term deposits. The new rates came into effect from June 1. 

For Canara Bank customers, the interest rate on term deposits with a tenure of one year was reduced by 10 bps to 6.75%. For FDs with tenures between three and five years, the interest rate was slashed 25 bps to 6.75%.

Similarly, PNB had reduced the interest by 10 bps on term deposits ranging from one year to 389 days. For FDs with 390-day tenure, the rate was lowered from 7% to 6.9%. The interest rate was cut from 6.8% to 6.7% on FDs with tenures ranging from 391 days to 505 days and from 507 days to two years.

The public sector lender had hiked the interest by 25 bps on term deposits with a 1204-day tenure, bringing it to 6.4%. For deposits with a tenure of 1205 days to five years, the rate was increased by 25 bps to 6.5%. 

With the RBI’s repo rate cut, other lenders are expected to announce a cut in FD rates. 

Disclaimer: To find the latest FD rates, it’s advisable to check the Fixed Deposit section on the official websites of the respective banks. Rates are subject to change without notice, and the rates provided in the table are per the latest updates as of June 6, 2025.

Apart from lowering the repo rate by 50 bps, the RBI has also slashed the cash reserve ratio or CRR by 100 bps. The cut will be implemented in four staggered stages. The move is expected to infuse primary liquidity of Rs 2.5 lakh crore into the banking system.

The central bank has lowered the inflation projection for the financial year 2026 to 3.7% from 4% in April.