Bank FD Rate: These 3 Banks Have Revised FD Rates, Know How Much Interest Customers Will Get Now!

Top Banks Increased FD Rates

Table of Contents:

Introduction
Impact of RBI's Repo Rate Cut on Fixed Deposits
City Union Bank FD Rates: Latest Revisions
DCB Bank’s Latest FD Rates
Karnataka Bank’s Revised FD Rates
Key Takeaways: How to Benefit from Revised FD Rates
Conclusion

Introduction

In February 2025, the Reserve Bank of India (RBI) took a significant step by cutting the repo rate by 25 basis points in its monetary policy meeting. This marked the first such rate cut in five years, which directly impacts various financial instruments, including Fixed Deposits (FDs). Following this move, several Indian banks have revised their FD interest rates to reflect the new economic conditions.

Among the banks that have announced changes to their FD interest rates are City Union Bank, DCB Bank, and Karnataka Bank. These changes offer new opportunities for both general and senior citizen customers to earn attractive returns on their fixed deposits.

If you are considering investing in FDs, it’s essential to know how these banks' revised interest rates compare and which bank offers the best deal for you. Let’s dive into the details of the revised FD rates and explore how much interest you can expect.

Impact of RBI's Repo Rate Cut on Fixed Deposits

The repo rate is the rate at which the Reserve Bank of India lends to commercial banks, influencing the overall lending and borrowing rates across the economy. When the RBI cuts the repo rate, it often leads to a reduction in interest rates on various financial products, including Fixed Deposits.

The February 2025 repo rate cut has directly impacted FD interest rates across several banks, as they adjust their offerings to align with the new market conditions. While the cut in rates has led to reduced FD returns, many banks are still offering competitive interest rates, especially for senior citizens.

Now, let’s take a closer look at the revised FD rates offered by City Union Bank, DCB Bank, and Karnataka Bank.

City Union Bank FD Rates: Latest Revisions

City Union Bank, a prominent player in the Indian banking sector, has revised its FD interest rates for deposits up to Rs 3 crore. The new rates, which came into effect on February 10, 2025, are as follows:

For General Citizens:

7 days to 10 years: Interest rates range from 5% to 7.50%.
333-day FD: The highest interest rate of 7.50% is offered for FDs of 333 days.

For Senior Citizens:

7 days to 10 years: Senior citizens can earn interest rates ranging from 5% to 8%.
333-day FD: Senior citizens can avail of an 8% interest rate for 333-day FDs.

DCB Bank’s Latest FD Rates

DCB Bank has also updated its FD interest rates following the RBI's repo rate cut. The revised rates, which came into effect on February 14, 2025, apply to deposits up to Rs 3 crore. The bank is offering interest rates ranging from 3.75% to 8.05%, depending on the FD term.

For General Citizens:

7 days to 10 years: Interest rates range from 3.75% to 8.05%.
19 months to 20 months FD: The highest interest rate of 8.05% is being offered for this tenure.

For Senior Citizens:

7 days to 10 years: Senior citizens can earn interest rates ranging from 3.75% to 8.55%.
19 months to 20 months FD: Senior citizens get an enhanced interest rate of 8.55%.

Karnataka Bank’s Revised FD Rates

Karnataka Bank, another significant player in the banking sector, has also revised its FD interest rates. The new rates, effective from February 18, 2025, apply to deposits up to Rs 3 crore. The bank’s rates range from 3.50% to 7.50% for general citizens and from 3.75% to 8% for senior citizens.

For General Citizens:

7 days to 10 years: Interest rates range from 3.50% to 7.50%.
401-day FD: The highest return is available on FDs of 401 days, offering a 7.50% interest rate.

For Senior Citizens:

7 days to 10 years: Senior citizens can enjoy interest rates ranging from 3.75% to 8%.
401-day FD: Senior citizens can avail of an 8% return on FDs of 401 days.

Key Takeaways: How to Benefit from Revised FD Rates

Senior Citizens Enjoy Higher Rates

All three banks have revised their FD rates with a clear focus on offering higher returns for senior citizens. If you are a senior citizen, you can avail of rates as high as 8.55%, which is quite attractive compared to regular FD rates.

Short-Term FDs Offering Higher Returns

City Union Bank offers the highest rate of 7.50% for FDs with a tenure of 333 days. DCB Bank also provides the highest return of 8.05% for 19-month FDs. If you are looking for a short-term investment with good returns, these periods may be worth considering.

Compare Rates Across Banks

It is important to compare FD rates across different banks to ensure you are getting the best possible returns on your investment. Though the rate cuts following the RBI’s decision are noticeable, there are still opportunities to lock in higher rates by choosing the right bank and FD tenure.

Long-Term FDs vs Short-Term FDs

Long-term FDs are ideal for those looking for guaranteed returns over an extended period. However, with the revised rates, shorter tenures such as 333 days or 19 months seem to be offering more attractive returns in some banks, which might be beneficial for investors seeking a balance between returns and flexibility.

Conclusion

The recent revisions in FD interest rates by City Union Bank, DCB Bank, and Karnataka Bank have created some excellent opportunities for both general customers and senior citizens. While the RBI’s repo rate cut has led to a reduction in overall FD rates, banks are still offering competitive returns, especially for short-term and senior citizen deposits.

Before deciding where to invest, it’s crucial to assess your financial goals, investment horizon, and the interest rate offers available. Whether you’re looking for higher returns on a shorter-term deposit or you’re a senior citizen aiming for an enhanced rate, there’s an option for you.

By carefully choosing the right bank and tenure, you can ensure that your FD investment works hard for you, providing a safe and reliable source of income for the future.