Green fd rate: A shocking news has come out for environmentally friendly investors. Bank of India has cut the interest rates of its green deposit scheme. Now the annual interest rate on this special fixed deposit scheme of 999 days has been reduced from 7% to 6.7%. These rates will be applicable to deposits ranging from 1 lakh to 10 crore rupees and will be considered effective from 7 July 2025.
Saving deposit holders also shock
Not only the green deposit was cut, but the common savings account holders have also suffered losses this time. The bank has reduced the interest rate on savings deposits up to Rs 1 lakh from 2.75% to 2.50%. Whereas only old rates will be applicable on saving deposits above 1 lakh.
What is different from Green FD.
The bank has designed the Green Deposit Scheme for the customers who want to contribute not only to investment but also to the betterment of the environment. Under this scheme, the bank puts the amount invested in the same projects that are associated with environmental-sensitive works like renewable energy (solar, wind etc.), green building development, smart agriculture and water and waste management.
This scheme is a type of fixed term deposit, but the person investing in it indirectly becomes part of the Green Mission. In this, the minimum amount can be invested up to ₹ 1,000 and a maximum of ₹ 3 crore.
What interest is getting in other banks.
Amid this cut by Bank of India, the country’s largest bank SBI also cut its FD rates by up to 0.25% in June 2025. Now there is 6.25% interest on 1 year FD. Earlier on 16 May, SBI cut 0.20%.
5 important facts to FD, which every investor should know
Fixed Interest Rate:
Once FD, the fixed interest rate does not change. That is, there is a prevention of market fluctuations.
Flexible period (tenure):
The duration of FD can range from 7 days to 10 years. Low in short periods, more interest is received in long periods.
Complete security:
DICGC insurance cover of up to ₹ 5 lakh is available on FD. That is, even if the bank drowns, your amount is safe.
Liquidity:
FD can be broken when needed, but there is a risk of penalty and low interest.
Tax exemption option:
A discount of up to ₹ 1.5 lakh can be taken under Section 80C on 5 -year tax saving FD. Pay attention to, interest is taxable.
What is the option now.
After cutting interest rates in Bank of India, the question has arisen in front of investors whether to continue investing in green deposit now. If your aim is only financial advantage, then other banks may be FD or debenture, mutual fund options. But if you give priority to sustainable investment, even though the return is reduced, this scheme is still valuable for the society.
Earning from ‘Green FD’
Bank of India may have made this change in its interest rates in view of recent repo rate cuts, but this will directly affect the growing steps towards common investors and green finance. The question is not whether the interest rate has come down, but whether people will still choose ‘Environment’ before ‘profit’.
