India’s largest public sector lender, State Bank of India (SBI), has delivered a disappointing blow to millions of its depositors, especially senior citizens and retirees, by slashing Fixed Deposit (FD) interest rates across multiple tenures. The bank has reduced the rates by 20 basis points (0.20%), and the revised rates came into effect from May 16, 2025.
This move affects FDs below ₹3 crore and excludes special deposit schemes. It's the second rate cut in just over a month, following a similar reduction in April 2025, creating growing concerns among conservative investors who rely heavily on fixed deposits for stable income.
🔻 What Are the New SBI FD Interest Rates?
After the latest revision, the revised interest rates for general depositors range from 3.30% to 6.70%, compared to the earlier 3.50% to 6.90%. Here’s a quick comparison:
| Tenure | Old Rate (%) | New Rate (%) |
|---|---|---|
| Short-term FDs | 3.50 | 3.30 |
| Mid-term FDs | ~6.50 | ~6.30 |
| Long-term FDs | 6.90 | 6.70 |
📌 Note: These rates apply to deposits under ₹3 crore and do not include special schemes like SBI Tax Saver or senior citizen-exclusive plans.
👵 Reduced Rates for Senior Citizens Too
SBI has not spared senior citizens, who typically receive higher interest rates as a safety cushion in retirement. Earlier, the FD interest rates for seniors ranged from 4% to 7.50%, which has now been brought down to 3.80% to 7.30%, including rates under the special SBI WeCare Deposit Scheme.
| Category | Old Rate (%) | New Rate (%) |
|---|---|---|
| Regular Senior Citizens | 4.00 – 7.50 | 3.80 – 7.30 |
| Under SBI WeCare Scheme | Up to 7.50 | Up to 7.30 |
🌾 SBI Amrit Vrishti Scheme: Interest Cut Here Too
The Amrit Vrishti Deposit Scheme, a popular special FD for a fixed 444-day tenure, has also seen rate cuts:
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General Customers: Earlier 7.05% → Now 6.85%
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Senior Citizens: Now 7.35%
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Super Senior Citizens (80+): Now 7.45%
These rates, though slightly higher for seniors, still reflect a declining trend that might impact those depending on interest income.
📉 Why This Cut Matters
This is SBI’s second rate cut in just over a month — the last one was implemented on April 15, 2025. With the back-to-back reductions, the return on traditional safe investments like FDs is becoming increasingly unattractive, especially when inflation-adjusted returns are considered.
For retirees and risk-averse investors, FDs were once a reliable choice. Now, this frequent reduction signals the need to re-evaluate investment strategies, possibly considering:
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Senior Citizens’ Savings Scheme (SCSS)
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Monthly Income Schemes (MIS)
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Post Office time deposits
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Conservative mutual funds (after risk assessment)
🔍 Summary of Key Updates
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Effective Date: New FD rates from May 16, 2025
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Rate Cut: Across all tenures by 20 basis points
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Who’s Affected?: General public, senior citizens, and even super senior citizens
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Amrit Vrishti Scheme: Reduced from 7.05% to 6.85% (general customers)
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Second cut within a month: Previous cut was on April 15, 2025
💬 Final Word
SBI’s successive FD rate cuts have significantly impacted the interest income of crores of Indians, particularly those who rely on these investments post-retirement. While SBI remains a trusted bank, low FD returns may force depositors to explore other secure options with better yields.
