RBI cuts repo rate: Check highest fixed deposit rates of 5 public, private and small finance banks

The Reserve Bank of India (RBI) has introduced another rate cut, bringing the total rate reduction for the current calendar year to 1.25% (125 basis points).

On Friday, December 5, the RBI’s Monetary Policy Committee (MPC) unanimously decided to reduce the key interest rate (repo) by 25 bps, lowering it to 5.25% from 5.5%, and kept the ‘neutral’ policy stance unchanged.

While the markets are expected to react positively, and borrowers will benefit from lower loan rates, the repo rate cut isn’t exactly good news for fixed deposit (FD) investors who seek a safe and reliable saving option.

When the RBI lowers the repo rate, the rate at which banks borrow money from the central bank reduces, due to which banks lower their loan interest rates. Simultaneously, they also lower their FD rates. This is why banks in India have consistently lowered their FD interest rates several times in 2025. With the current rate cut, banks may lower their fixed deposit interest rates further.

Banks offering highest interest rates

Here are the top 5 highest interest rate offering banks in the public sector:

Here are the top 5 highest interest rate offering banks in the private sector:

Here are the top 5 highest interest rate offering small finance banks:

Lower FD interest rates

While the RBI has lowered the repo rate, impacting hopes for higher FD rates, investors use strategies like FD laddering to save more.

Fixed Deposit (FD) laddering is an investment strategy in which one invests in multiple FDs with different maturity periods and interest rates instead of a single FD. This allows individuals to maintain cash flow, have higher returns and save more over time.