On May 16, 2025, the State Bank of India (SBI) implemented a 20 basis point (bps) cut in fixed deposit (FD) interest rates across multiple tenures. This marks the second FD rate cut in the current financial year, following a reduction of up to 25 bps in April 2025.

The revised SBI FD rates reflect broader changes in the financial ecosystem following the RBI’s repo rate cut, and they could have a direct impact on both savers and borrowers. While depositors may see slightly lower FD returns, borrowers stand to benefit from cheaper home loans and reduced EMIs.

Updated SBI FD Interest Rates – Effective May 16, 2025

📌 Note: These changes do not apply to Recurring Deposits (RDs), MOD accounts, or Green Rupee Term Deposits.

Why Did SBI Cut FD Rates in May 2025?

The FD rate revision is in line with the Reserve Bank of India’s liquidity measures, aimed at reducing borrowing costs and encouraging credit growth. In April, the RBI injected nearly ₹5 lakh crore into the banking system, prompting banks like SBI to adjust fixed deposit interest rates to manage the cost of funds.

This shift reflects a broader market trend, and other banks–including private sector lenders–are expected to follow by lowering both deposit and lending rates in the weeks ahead.

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How Will the SBI FD Rate Cut Impact Depositors?

If you depend on FDs for regular income, this change could reduce your expected returns–especially on long-term deposits. For instance, the 5–10 year FD now offers 6.3% for the general public and 7.3% for senior citizens.

To make the most of your savings in this environment, consider:

• Exploring low-risk investment alternatives such as debt mutual funds or government securities

• Using an FD laddering strategy to spread your investment across tenures for better flexibility and returns

Good News for Borrowers: Lower Loan Interest Rates Ahead

The reduction in SBI FD rates is likely to bring down the bank’s Marginal Cost of Funds Based Lending Rate (MCLR). This will likely lead to lower interest rates on home loan, personal loan, car loan, and education loan.

If you’re planning to borrow or refinance, this is a great time to:

• Lock in a lower home loan rate

• Transfer your existing loan balance to save on interest

• Use the Home Loan EMI Calculator to evaluate your new monthly repayment

Will Private Banks Also Reduce Interest Rates?

Yes, SBI’s move will likely influence private banks to adjust their FD and loan rates to remain competitive–especially in segments like home loans and personal finance. Expect to see:

• More competitive interest rate offers

• Flexible loan terms and limited-period promotions

• Easier eligibility criteria to attract new borrowers

Borrowers can explore the competitive loan options with our Loan Comparison Tool and calculate potential savings using our EMI Calculator.

Final Thoughts: Make Smarter Financial Moves in a Changing Rate Environment

SBI’s FD rate cut is more than just a change in interest rates-it’s a signal of broader market trends. As the savings rates soften, lending becomes more affordable, creating valuable opportunity for prospective borrowers.

If you’re considering a home loan, this is an ideal time to:

• Lock in lower interest rates

• Reduce your monthly EMIs

• Explore balance transfer options to save on the interest

To understand how much you could save, try our easy-to-use Home Loan EMI Calculator. Just enter your loan amount, tenure, and interest rate to instantly estimate your monthly repayment and total cost.

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