RBI cut the repo rate by 25 basis points in February followed by another 25 basis points cut in April and a jumbo cut of 50 bps in June. In total, RBI cut the repo rate by 100 basis points in 2025.
With lower rates, lower interest on FDs too followed. Let us find out what are the latest interest rates offered by top banks and how they compare with the rates offered by PPF.
Public Provident Fund (PPF)
Interest offered on public provident fund is 7.1 percent per annum with effect from Jan 1, 2024. One can invest anywhere between ₹500 to ₹1.50 lakh in a financial year.
Deposit can be made in instalment as well as lumpsum. It offers tax deduction under section 80C upto ₹1.50 lakh. Moreover, interest income is tax free.
Interest offered on fixed deposits (FDs)
Unlike PPF, investment in FD is not entitled to any income tax deduction. Moreover, the interest income on FD is taxable, which further reduces the total earned income. Here we give a lowdown on the higher interest rates offered by major banks.
HDFC Bank: From June 10, HDFC Bank offers the highest rate of 6.60 percent on deposits of tenure between 15 to 21 months to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
ICICI Bank: This private sector bank offers the highest rate of 6.60 percent on deposits of tenure longer than 2 years to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
Kotak Mahindra Bank: With effect from June 18, this private sector bank offers 6.60 percent on deposits of tenure between 391 days to 23 months to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
IDFC Bank: From June 13, IDFC Bank offers 6.75 percent on deposits of tenure between 2 to 5 years to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
Union Bank: From June 12, HDFC Bank offers 6.85 percent on deposits of tenure of 456 days to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
State Bank of India (SBI): From June 15, SBI offers 6.45 percent on deposits of tenure between 2-3 years to regular citizens. Senior citizens are entitled to receive an extra 50 basis points.
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