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Lending and deposit rates are impacted by the repo rate drop because it reduces banks’ cost of funding. Lower fixed deposit (FD) interest rates will result from a lower repo rate, and vice versa.
DCB Bank slashes FD rates post RBI repo rate cut.
DCB Bank, a private sector bank, has cut its interest rates up to 65 bps on fixed deposits below Rs 3 crore for some tenures. The revised rates have become effective from February 14, 2025, according to the bank’s website.
The revision in the FD rates came following the RBI’s decision to cut its repo rate by 25 basis points to 6.25 per cent from 6.50 percent in the February MPC meeting 2025. The cut in the benchmark lending rate was the first in near five years.
Lending and deposit rates are impacted by the repo rate drop because it reduces banks’ cost of funding. Lower fixed deposit (FD) interest rates will result from a lower repo rate, and vice versa.
New Interest Rates
After the change, DCB Bank currently provides interest rates ranging from 3.75% to 8.05% for regular citizens with FD balances under Rs 3 crore for terms varying from 7 days to 10 years. For FDs with a duration of 19 to 20 months, the highest interest rate of 8.05% is available.
For balances under Rs 3 crore, the bank offers senior citizens interest rates ranging from 4.25% to 8.55%; the highest FD interest rate of 8.55% is available to them for a period of 19 to 20 months.
For Which FD Tenures Have Interest Rates Decreased?
The FD interest rate for ordinary citizens has been lowered by 55 basis points, from 8.05% to 7.50%, for tenures longer than 26 months but shorter than 37 months. From 8.05% to 7.85%, the bank has lowered the FD interest rate by 20 basis points for tenures between 37 and 38 months.
Additionally, DCB Bank lowered the FD interest rate for tenures longer than 38 months but shorter than 61 months by 65 basis points, from 8.05% to 7.40%.
