State Bank of India (SBI) has once again reduced the interest rates on Fixed Deposits (FD). This time, the bank has cut FD rates by 0.20%. Now, a one-year FD will fetch only 6.5% interest. These new rates have come into effect from May 16, 2025.

This marks the second consecutive month that SBI has reduced FD rates. The bank had lowered the rates last month as well.

The special FD scheme ‘Amrit Kalash’ has also seen a 0.20% reduction in interest rate. Under this scheme, a 444-day FD will now earn only 6.85% interest, whereas the earlier rate was higher.

Why is this change important?

Investors will get lower returns, which may reduce the appeal of traditional savings options.

This is disappointing news for senior citizens, who generally consider FDs a safe investment option.

The shift toward market-linked investments like mutual funds might increase.

Conclusion:

If you are planning to invest in an FD with SBI, consider these new rates before making a decision. You may also want to explore alternative investment options.