Latest Fixed Deposit Rates in April 2025: With the Reserve Bank of India (RBI) reducing its lending rate for commercial banks to 6%, several changes in banking products are expected in the coming days. Many banks have already lowered interest rates on products like home loans, which are directly linked to external benchmarks.
For the banks, the Repo Rate or lending rate by the RBI often serves as a benchmark for determining the interest rates on various financial instruments, such as loans and fixed deposits (FDs).
While loan products like home and car loans are inversely related to the repo rate, in contrast, FD rates usually move in the same direction as the repo rate. This means that a rate cut offered by the RBI would prompt banks to lower the interest rates offered on the FDs. This happens because when the RBI raises the repo rate, borrowing becomes more expensive for banks. To attract more deposits (like FDs), banks often increase FD interest rates. With a lower repo rate, banks don’t need to rely as much on FDs to fund lending. Hence, they may reduce their need to offer higher FD rates.
