Four Big Banks Reset Fixed Deposit Rates: How to Compare Before You Book

ICICI Bank, Indian Bank, SBI and HDFC Bank have recently revised their fixed deposit (FD) interest rates. This is according to reporting by The Economic Times. If you hold an FD or plan to open one, your returns could be affected.

We haven't repeated the exact new rates here, because they sit in the original report. Check each bank's own rate card before you book. Even a small gap in rates adds up over a few years.

Key takeaways

• Four big banks have updated their FD rates, as reported by The Economic Times.
• Your existing FD keeps the rate you locked in on the day you booked it.
• New deposits and renewals will get the new rates.
• Compare tenure, not just the headline rate, before you choose.
• Deposits are insured up to ₹5 lakh per depositor per bank.

How FD interest rates work

An FD is a deal with your bank. You park a lump sum for a fixed time. The bank pays you interest at a rate it promises on day one.

Banks change their FD rates from time to time. They look at how much money they need, what the RBI's policy rate is, and what rivals pay. The RBI's policy rate is called the repo rate. It's the rate at which the RBI lends to banks.

When the repo rate falls, deposit rates often fall too. When it rises, they often rise. It isn't automatic, though. Each bank decides on its own.

What the new FD rates mean for your savings

Let's use an easy example. Say you put ₹1,00,000 in an FD for one year. The table below shows the rough interest at different rates. These are sample rates only, not the actual rates of any bank.

Sample FD rate (per year)	Interest on ₹1,00,000 in one year (approx.)	Difference from 6%
6.0%	₹6,000	None
6.5%	₹6,500	₹500 more
7.0%	₹7,000	₹1,000 more
7.5%	₹7,500	₹1,500 more

Banks usually add interest every quarter, so your real return can be slightly higher. The table keeps things simple. The point is that a half percent gap means about ₹500 on every ₹1 lakh.

On a bigger deposit, the gap grows. A ₹10 lakh FD would earn ₹5,000 more a year for every half percent. That's why it pays to compare.

Who is affected

Not everyone feels this news in the same way.

• New savers: You'll get the new rates when you open an FD.
• People with maturing FDs: Your renewal will use the new rate, which may be higher or lower than before.
• Senior citizens: Banks usually pay seniors extra interest, so check the senior rate on the rate card.
• Existing FD holders: Nothing changes until your FD matures.

If you also borrow, falling or rising deposit rates can hint at where loan rates are heading. You can track both on our interest rates page.

What to do now

You don't need to panic or rush. A calm check takes only a few minutes.

1. Open the rate card on your bank's website or app.
2. Look at the rate for the tenure you want, not just the top rate.
3. Compare two or three banks for the same tenure.
4. Check if your deposit is within the ₹5 lakh insurance limit per bank.
5. Think about taxes, since FD interest is added to your income.

If you may need the money early, choose a shorter tenure. Breaking an FD early usually costs you a penalty. For more money news, visit our news hub.

Frequently asked questions

Will my existing FD rate change after this news?

No. Your FD keeps the rate fixed on the day you booked it. The new rates apply only to new deposits and renewals.

Which bank has the best FD rate now?

That depends on the tenure and on whether you're a senior citizen. Check each bank's rate card for the exact tenure you want.

Is my FD safe if the bank changes its rates?

A rate revision doesn't affect safety. Deposits at banks are insured up to ₹5 lakh per depositor per bank.