Banks Tighten Purse Strings: FD Rates Dip, Loan Rates Hold Steady in February 2025

A few top Indian banks cut their fixed deposit (FD) interest rates in February 2025, after the Reserve Bank of India cut interest rates by 25 basis points. City Union Bank currently offers 5-7.50% on FDs, while DCB Bank cut rates to 3.75-8.05%. But loan interest rates saw little change, which could further compress profit margins for savers. This trend is likely to continue, with experts predicting another rate cut in mid-2025. The shift impacts different tenures of deposits, with banks launching special schemes to lure investors. Senior citizens still get a better rate of interest, but the overall pattern indicates a tough time for fixed-income investors in the next few months.

 

Sources: Economic Times, Business Today