Kotak Mahindra Bank has surprised its customers by reducing interest rates on Fixed Deposits (FDs) soon after the Reserve Bank of India (RBI) lowered the repo rate.
On the morning of April 9, 2025, the RBI announced a cut in the repo rate from 6.25% to 6% as part of its monetary policy.
Just hours later, Kotak Mahindra Bank followed by announcing a cut in its FD interest rates by up to 15 basis points for certain tenures. Kotak Mahindra is one of the leading private sector banks in India.
New Interest Rates Effective from April 9
According to the bank, the revised FD rates came into effect on April 9, 2025.
Typically, when the RBI reduces the repo rate, banks follow by lowering interest rates on home loans and FDs.
The repo rate cut is aimed at boosting economic growth. This is the second repo rate cut this year—the first one happened in February.
Following the change, Kotak Mahindra Bank’s interest rates on regular FDs now range from 2.75% to 7.30%, while for senior citizens, the rates are between 3.25% and 7.80%.
Other Banks May Follow Soon
Though Kotak Mahindra Bank’s rate cut isn’t very large, it signals a trend. Other banks are also expected to revise their FD interest rates downward in response to the repo rate cut.
This may also lead to lower interest rates on home and auto loans.
Expert Advice for FD Investors
Financial experts suggest that those planning to invest in FDs should do so quickly. Once banks reduce their FD rates further, new investors will get lower returns.
If you invest before the next round of rate cuts, you can lock in the current higher rates.
