The country’s largest lender has lowered the interest rate on its special 444-day fixed deposit scheme, ‘Amrit Vrishti’, by 0.15 percentage points. With effect from December 15, the scheme will offer 6.45% per annum for general customers, while senior citizens will earn 6.95%. SBI has also trimmed rates on FDs with tenures ranging from two years to less than three years by 0.05 percentage points, bringing the revised rate to 6.40% from 6.45%.

Bank officials said the revision reflects easing funding costs after the RBI reduced the repo rate to 5.25%, making borrowing from the central bank cheaper for lenders. As banks gain access to lower-cost funds, they tend to moderate deposit rates to manage margins.

SBI, however, has kept interest rates unchanged under its special ‘WeCare Deposit’ scheme for senior citizens. Under this scheme, depositors aged 60 years and above continue to receive an additional 0.50% interest on FDs of less than five years compared to the general public. For deposits with a tenure of five years or more, senior citizens earn a premium of 1%. Currently, the WeCare scheme offers up to 7.05% interest on FDs with maturities of five years and above.

Market analysts said more banks could follow suit in the coming weeks as the repo rate cut works its way through the system. For depositors, especially those reliant on fixed-income returns, the changes underline the importance of tracking tenure-specific rates and special schemes before locking in funds.

Despite the reduction, fixed deposits remain a preferred savings avenue due to assured returns, flexibility in tenure, deposit insurance cover up to ₹5 lakh, and tax benefits on five-year tax-saving FDs. However, interest income continues to be taxable as per the investor’s income slab.