For investors relying on FDs for stable income, particularly senior citizens, the move is expected to prompt banks to recalibrate interest rates on new deposits.
Easing cycle and FD adjustments
The RBI’s reduction reflects room in the economy to lower borrowing costs without stoking inflation.
Saurabh Jain, Co-founder and CEO of Stable Money, noted that banks have already responded to previous cuts by reducing FD rates by 1–1.5% across popular tenures.
With the latest cut, further downward adjustments are likely.
He highlighted that investors who lock in FDs before banks implement new rates can protect themselves from lower returns, effectively creating a window to secure higher interest in a falling-rate environment.
A look at FD rates of current banks
|
Bank
|
Interest Rates for General Public (p.a)
|
Interest Rates for Senior Citizens (p.a)
|
|
Axis Bank
|
3.00% – 6.60%
|
3.50% – 7.35%
|
|
Bandhan Bank
|
2.95% – 7.20%
|
3.70% – 7.70%
|
|
Bank of Baroda
|
3.50% – 6.60%
|
4.00% – 7.10%
|
|
Central Bank of India
|
3.50% – 6.50%
|
4.00% – 7.00%
|
|
HDFC Bank
|
2.75% – 6.60%
|
3.25% – 7.10%
|
|
ICICI Bank
|
2.75% – 6.60%
|
3.25% – 7.10%
|
|
IDBI Bank
|
3.00% – 6.55%
|
3.50% – 7.05%
|
|
IDFC FIRST Bank
|
3.00% – 7.00%
|
3.50% – 7.50%
|
|
IndusInd Bank
|
3.25% – 7.00%
|
3.75% – 7.50%
|
|
Karnataka Bank
|
3.50% – 6.65%
|
3.75% – 7.05%
|
|
Kotak Mahindra Bank
|
2.75% – 6.60%
|
3.25% – 7.10%
|
(Source: Bankbazaar)Strategies for investors
Financial advisers recommend that depositors adopt FD laddering, spreading investments across multiple tenures to maintain liquidity while mitigating reinvestment risk.
Adhil Shetty, CEO and Co-founder of BankBazaar, pointed out that depositors, especially retirees, should consider locking in longer-term FDs while higher slabs are still available. He explained that while lower rates support borrowers and economic growth, they directly reduce fixed-income returns, making strategic decisions around tenure and laddering critical for preserving yields.
Other investment options, including corporate FDs, debt mutual funds, and government securities, may offer higher returns but come with varying risk profiles.
Medium- and long-term FDs could continue to offer relatively better yields, giving depositors a tool to navigate the easing cycle strategically.
Shashank Gupta, Director, RPS Group, added that investors must accept that long-term FD returns will likely be lower as the easing cycle progresses.
“One of the best means is FD laddering: dividing the investments into different tenures so that not all the deposits will be locked at the current lower rates, and there will always be some maturities ready to take the rates if the cycle changes. Senior citizens can choose a combination of bank FDs, high-rated corporate FDs, and small savings schemes for safety with slightly higher yields instead of depending on just one product,” he said.
Broader investment implications
Lower deposit rates also influence portfolio strategies.
Ankur Jalan, CEO of Golden Growth Fund, explained that affluent investors and family offices may redirect funds toward higher-yielding products such as real estate-focused funds to preserve real returns.
The reduced cost of capital from the rate cut also improves project viability for developers, indirectly supporting alternative investment avenues.