The Reserve Bank of India (RBI) has elected to keep the repo rate unchanged at 5.5% during its Monetary Policy Committee (MPC) meeting from September 29 to October 1, 2025. This decision marks the second consecutive time the rate has remained steady. Alongside this, the MPC has decided to maintain a "neutral" stance on monetary policy. The last time the RBI cut rates was in June 2025, by 50 basis points.
Impact of the Unchanged Repo Rate
- Borrowing Costs: The repo rate is a benchmark for borrowing costs. Keeping it unchanged provides stability in borrowing costs.
- Inflation: The RBI has revised its inflation forecast for the full financial year to 2.6%, significantly lower than the earlier projection of 3.7% in June. This decline is mainly due to lower food prices, supported by a good monsoon and stable food grain supplies.
- Economic Growth: India's economy shows resilience, with a GDP growth of 7.8% in the first quarter of FY26, driven by private consumption and investment. The real GDP growth for the year has been revised upward to 6.8% from an earlier estimate of 6.5%.
Fixed Deposit (FD) Rates at Major Banks
Here's a comparison of the highest FD interest rates offered by some of the leading banks in India as of late September 2025:
- State Bank of India (SBI): Offers interest rates between 3.05% and 6.60% to the general public, and 3.55% and 7.10% to senior citizens. The highest rates are applicable to the "Amrit Vrishti" special FD for a 444-day tenure.
- ICICI Bank: Provides FD interest rates ranging from 2.75% to 6.60% for general citizens and 3.25% to 7.1% for senior citizens. The highest rates are offered on tenures from 2 years 1 day to 10 years.
- HDFC Bank: Offers FD interest rates between 2.75% and 6.60% to general citizens and 3.25% and 7.10% to senior citizens. The peak rates are applicable for tenures of 18 months to less than 21 months.
- Punjab National Bank (PNB): Offers FD interest rates from 3% to 6.60% to the general public and 3.50% to 7.10% to senior citizens. The highest rates are offered on a tenure of 390 days. Current PNB FD rates range between 3.50% p.a. – 7.25% p.a. Senior citizens can avail interest rates ranging from 4.00% p.a – 7.75% p.a.
Comparison Table of Highest FD Rates (as of Late September 2025)
| Bank | General Citizens | Senior Citizens | Tenure for Highest Rate (Example) | |---------------|-----------------|-----------------|------------------------------------| | SBI | 6.60% | 7.10% | 444 days (Amrit Vrishti) | | ICICI Bank | 6.60% | 7.10% | 2 years 1 day to 10 years | | HDFC Bank | 6.60% | 7.10% | 18 months to less than 21 months | | Punjab National Bank | 6.60% | 7.10% | 390 days |
Note: These rates are subject to change and may vary based on the specific terms and conditions of the respective banks.
Factors Influencing FD Rates
Several factors can influence FD rates, including:
- Repo Rate: The repo rate, set by the RBI, influences the interest rates banks offer on loans and deposits.
- Inflation: High inflation can lead to higher interest rates to attract deposits.
- Liquidity: Banks' need for funds affects their deposit rates.
- Economic Growth: A growing economy can lead to increased demand for credit and potentially higher interest rates.
- Competition: Competition among banks can also influence FD rates.
Investment Advice
Though the RBI has maintained a neutral stance, some anticipate a potential rate cut of 25 basis points in the coming months. Before investing in FDs, it's important to compare interest rates across different banks and consider the tenure and your financial goals. Senior citizens often benefit from higher FD rates, making them a reliable investment option for steady income.
