Kotak Follows RBI's Lead, Trims FD Rates by Up to 15 bps; What Should Investors Do Now?

Kotak Mahindra Bank has slashed its Fixed Deposit (FD) interest rates, implementing its first rate cut since June 2024. The new FD rates are effective from April 9, 2025 and will have a reduction of up to 15 basis points on select tenures. Just Yesterday the Reserve Bank of India announced its latest monetary policy decision where it slashed the repo rate by 25 basis points, bringing it down to 6%. The RBI governor Sanjay Malhotra said that this rate cut is intended to stimulate economic growth. Other banks may follow suit in the coming weeks as Kotak Mahindra Bank has set the tone.

Latest FD Interest Rates at Kotak Mahindra Bank

Post-revision, Kotak Mahindra Bank now offers FD interest rates which range from 2.75% to 7.30% for general customers and 3.25% to 7.80% for senior citizens. Previously, the rates ranged between 2.75% and 7.40% for regular account holders and 3.25% to 7.90% for senior citizens. These changes apply to deposits under ₹3 crore and are applicable for tenures starting from 7 days up to 10 years.

Tenure	FD Rate	Senior Citizen FD Rate
7 to 14 Days	2.75%	3.25%
15 to 30 Days	3.00%	3.50%
31 to 45 Days	3.25%	3.75%
46 to 90 Days	3.50%	4.00%
91 to 120 Days	4.00%	4.50%
121 to 179 Days	4.25%	4.75%
180 Days	7.00%	7.50%
181 to 269 Days	6.00%	6.50%
270 Days	6.00%	6.50%
271 to 363 Days	6.00%	6.50%
364 Days	6.50%	7.00%
365 to 389 Days	7.10%	7.60%
390 Days	7.25%	7.75%
391 Days to Less than 23 Months	7.30%	7.80%
23 Months	7.25%	7.75%
23M 1D to Less than 2 Years	7.15%	7.65%
2 to Less than 3 Years	7.15%	7.65%
3 to Less than 4 Years	7.00%	7.50%
4 to Less than 5 Years	7.00%	7.50%
5 to Less than10 Years	6.20%	6.70%

FD Rate Cuts Details You Should Know

Let's take a closer look at the FD tenures that have been revised:

• 390 Days (12 months, 25 days): Reduced from 7.40% to 7.25% (down 15 bps)
• 391 Days to Less than 23 Months: Slashed from 7.40% to 7.30% (down 10 bps)
• Exact 23 Months: Trimmed from 7.30% to 7.25% (down 5 bps)
• 23 Months 1 Day to Less than 2 Years: Brought down from 7.30% to 7.15% (down 15 bps)

What Happens If You Break Your FD Early at Kotak Mahindra Bank?

Kotak Mahindra Bank has explained how it will handle your Fixed Deposit (FD) if you decide to withdraw it before it matures. If you break your FD early, the interest you earn will be calculated in two ways:

• Based on the interest rate that was applicable when you opened the FD for the actual number of days you kept the money.
• The original interest rate that was promised when you booked the FD.

You'll get the lower of the two. On top of that, the bank will also deduct a small penalty for withdrawing the money early.
This update comes as Kotak Mahindra Bank has recently reduced its FD interest rates. And with the RBI also cutting the repo rate by 25 basis points to 6%, it's clear that interest rates on fixed deposits are going down across the board.

If you depend on FDs to grow your savings safely, you might earn a little less interest than before. That's why experts suggest options like FD laddering-which means opening multiple FDs with different maturity dates-to balance your returns and avoid locking all your money at one rate. Or, you could stick to short-term FDs for now and wait to see if rates go back up in the future.