YES Bank, Kotak, and Axis Banks trim FD rates for the second time amid repo rate cut; what investors should note

YES Bank, Kotak Mahindra Bank, and Axis Bank have announced another reduction in their fixed deposit (FD) interest rates this April. This follows the Reserve Bank of India's (RBI) decision to lower the repo rate by 25 basis points from 6.25% to 6.00% during its April 9 monetary policy meeting.

YES Bank has reduced its highest FD offer for retail investors from 7.75% to 7.50%, applicable to deposits below Rs 3 crore with tenures ranging from seven days to 10 years. The new rates took effect on April 21, affecting returns for investors who rely on FDs for steady income.

Kotak Mahindra Bank has also adjusted its FD rates, marking the second cut this month. The bank's highest offering is now 7.15% for select tenures, down from 7.30%, with the revised rates starting from April 23.

Additionally, Axis Bank's FDs now offer general citizens rates between 3% and 7.05%, while senior citizens can secure rates up to 7.55% for similar tenures. These changes reflect broader shifts in the banking sector as financial institutions adjust to the new repo rate environment.

Kotak Mahindra Bank: FD Rates

Effective from 23rd April 2025 for Domestic / NRO / NRE. (Rates are subject to change from time to time)

* Senior citizen rates apply only to resident individuals aged 60 years and above.
# Interest rates and yields are for deposits less than ₹3 crore and are subject to change without prior notice.

YES Bank FD Rates

Axis Bank FD rates 

Repo rate cut and FD rates

The repo rate cut aims to stimulate the economy by making borrowing more attractive, but it also impacts traditional savings options like fixed deposits. With major banks, including State Bank of India, HDFC Bank, and ICICI Bank, making similar moves, the appeal of FDs as a savings vehicle is diminishing. Investors keen on consistent returns might consider securing current rates before they decline further or explore alternative investment avenues to hedge against the reduced attractiveness of FDs.

FD rates and senior citizens

The reduction in FD rates is particularly significant for senior citizens who often rely on fixed income schemes. Kotak Mahindra Bank now offers senior citizens rates between 3.25% and 8.25% across various tenures. For Axis Bank, senior citizens can earn up to 7.55%, while YES Bank offers a maximum of 8.25% for deposits up to 24 months. These changes urge long-term savers to act swiftly to lock in favourable rates.

As banks continue to adjust deposit rates in response to RBI's policy, the competition among financial institutions intensifies. Other banks, such as Canara Bank and IDFC Bank, have also reduced rates, indicating a sector-wide shift. The ongoing adjustments highlight the importance for depositors to stay informed and strategically plan their investments to optimise returns in a dynamic financial landscape.