The country’s largest banks by market value currently pay annual returns to the tune of 2.5-5.5 per cent on retail fixed deposits. State Bank of India, HDFC Bank and Kotak Mahindra Bank offer a variety of maturity options of retail fixed deposits to customers. Retail FDs – or FDs up to ₹ 2 crore – today are available in maturities – or lock-in periods – ranging from seven days to 10 years. The interest rates are revised from time to time, to align them with benchmark interest rates set by the Reserve Bank of India.
Most lenders provide slightly higher interest rates to senior citizens compared to other customers.
This year, the RBI has reduced the repo rate – or the key interest rate at which it lends money to banks – by a total of 115 basis points since February, on top of 135 basis points last year. This has also forced banks to lower their FD rates.