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Business Standard
30-06-2025
- Business
- Business Standard
FD interest rates up to 9.10%: 15 banks offer 7.80% or more to seniors
Can you still get over 8 per cent on a fixed deposit? Despite this year's repo rate cuts, the answer is yes—at least for now. The Reserve Bank of India (RBI) has cut the repo rate by 100 basis points since February 2025. In response, several banks have reduced their fixed deposit (FD) interest rates. But a few small finance and private banks continue to offer interest rates above 7.80 per cent, especially for senior citizens. Top FD rates as of June 30, 2025 For deposits below Rs 3 crore, some small finance banks are offering relatively high FD rates for senior citizens. As of June 28, 2025, Unity Small Finance Bank is offering the highest FD rate at 9.10 per cent for a tenure of 1001 days. Suryoday Small Finance Bank follows with 8.80 per cent for tenures above 30 months and up to 3 years. Utkarsh Small Finance Bank is offering 8.75 per cent for deposits held between 2 and 3 years. Slice Small Finance Bank is offering 8.50 per cent for a narrowly defined window of 18 months 1 day to 18 months 2 days. Equitas Small Finance Bank offers 8.40 per cent for a tenure of 888 days. All rates apply to senior citizens and are available on deposits of less than Rs 3 crore. These figures are based on each bank's official website as of June 28, 2025. Regular depositors can also find rates above 8 per cent, though options are fewer. Experts say locking in the current rate may help, as further cuts could follow if the repo rate continues to drop. Tax rules on FD interest Interest earned on fixed deposits is taxable. If the interest exceeds a certain threshold, tax is deducted at source. 'Interest earned on FDs is taxable, with tax deducted at source (TDS) if it exceeds a specified limit,' said Adhil Shetty, CEO of BankBazaar. The 2025 Union Budget raised the TDS threshold: For general citizens: From Rs 40,000 to Rs 50,000 For senior citizens: From Rs 50,000 to Rs 1 lakh Take the example of Nupur, a 38-year-old resident of Noida. She earns Rs 75,000 in annual FD interest. Since the new threshold for general citizens is Rs 50,000, TDS applies on the excess Rs 25,000. At 10 per cent, the deducted tax is Rs 2,500. That Rs 75,000 also counts as part of her total taxable income. But if her overall income is below Rs 2.5 lakh, she doesn't owe additional tax. To avoid TDS in such a case, she can submit Form 15G at the start of the financial year, declaring her income falls below the taxable limit. Senior citizens can submit Form 15H for the same purpose. Take a look at the banks offering the highest interest rate as of June 28, according to PaisaBazaar: Small Finance Banks 1. Equitas Small Finance Bank Highest rate: 8.40 per cent for 888 days 1-year: 8.10 per cent 3-year: 8.00 per cent 5-year: 7.75 per cent 10-year: 7.75 per cent No extra rate for super senior citizens 2. ESAF Small Finance Bank Highest rate: 8.10 per cent for 444 days 1-year: 5.25 per cent 3-year: 6.50 per cent 5-year: 6.25 per cent 10-year: 6.25 per cent No extra rate for super senior citizens 3. Jana Small Finance Bank Highest rate: 8.25 per cent (Above 1 year to 3 years) 1-year: 8.00 per cent 3-year: 8.25 per cent 5-year: 8.20 per cent 10-year: 7.00 per cent No extra rate for super senior citizens 4. Slice Small Finance Bank Highest rate: 9.00 per cent (18 months 1 day to 18 months 2 days) 1-year: 7.00 per cent 3-year: 8.25 per cent 5-year: 8.25 per cent 10-year: 6.75 per cent No extra rate for super senior citizens 5. Suryoday Small Finance Bank Highest rate: 8.80 per cent (Above 30 months to 3 years) 1-year: 8.30 per cent 3-year: 8.80 per cent 5-year: 8.40 per cent 10-year: 7.65 per cent No extra rate for super senior citizens 6. Ujjivan Small Finance Bank Highest rate: 8.25 per cent for 2 years 1-year: 8.15 per cent 3-year: 7.70 per cent 5-year: 7.70 per cent 10-year: 7.00 per cent No extra rate for super senior citizens 7. Unity Small Finance Bank Highest rate: 9.10 per cent for 1001 days 1-year: 7.50 per cent 3-year: 8.50 per cent 5-year: 8.50 per cent 10-year: 7.50 per cent No extra rate for super senior citizens 8. Utkarsh Small Finance Bank Highest rate: 8.75 per cent (2 to 3 years) 1-year: 6.75 per cent 3-year: 8.75 per cent 5-year: 8.25 per cent 10-year: 7.75 per cent No extra rate for super senior citizens Private Sector Banks 9. Bandhan Bank Highest rate: 8.25 per cent for 1 year 1-year: 8.25 per cent 3-year: 7.75 per cent 5-year: 6.60 per cent 10-year: 6.60 per cent No extra rate for super senior citizens 10. CSB Bank Highest rate: 7.90 per cent for 13 months 1-year: 5.50 per cent 3-year: 6.25 per cent 5-year: 6.25 per cent 10-year: 6.50 per cent No extra rate for super senior citizens 11. DCB Bank Highest rate: 7.90 per cent (25 to 26 months) 1-year: 7.25 per cent 3-year: 7.25 per cent 5-year: 7.25 per cent 10-year: 7.25 per cent No extra rate for super senior citizens 12. Jammu & Kashmir Bank Highest rate: 7.80 per cent for 888 days 1-year: 7.25 per cent 3-year: 7.25 per cent 5-year: 7.00 per cent 10-year: 7.00 per cent No extra rate for super senior citizens 13. RBL Bank Highest rate: 7.80 per cent for 500 days 1-year: 7.60 per cent 3-year: 7.60 per cent 5-year: 7.50 per cent 10-year: 7.50 per cent Super senior citizens get +0.25 per cent on all tenures 14. SBM Bank India Highest rate: 8.55 per cent (Above 18 months to less than 2 years 3 days) 1-year: 8.00 per cent 3-year: 7.80 per cent 5-year: 8.25 per cent 10-year: 7.50 per cent No extra rate for super senior citizens 15. YES Bank Highest rate: 7.85 per cent (3 years to less than 5 years) 1-year: 7.25 per cent 3-year: 7.85 per cent 5-year: 7.50 per cent 10-year: 7.50 per cent
Mint
22-06-2025
- Business
- Mint
RBI's rate cut may not bring immediate EMI relief for all borrowers
The Reserve Bank of India (RBI) has cut the repo rate by 50 basis points (bps) and the cash reserve ratio (CRR) by 100 bps, raising hopes among borrowers of lower EMIs. But rate cuts by the central bank don't automatically translate into immediate relief for all loan categories. The actual transmission, whether faster, slower, or none at all, will depend on multiple factors, including the type of loan, when it was taken, the lending institution, and the benchmark it is linked to. Fixed or floating: the nature of your loan matters Certain loan categories — particularly personal loans and credit card debt — are typically offered at fixed interest rates. The rate set at the time of disbursement remains unchanged through the tenure of the loan, regardless of RBI's policy moves. Read this | Mint Explainer: RBI cuts repo rate by 50 bps. How will it impact lenders and borrowers? 'Most lenders offer loans in these categories as fixed-rate loans. Then there are categories, which are more of a mixed bag. For example, loans such as car loans and loans against securities," said Adhil Shetty, chief executive officer of BankBazaar. To be sure, some public sector banks even offer personal loans with a floating rate option. When it comes to car loans or loans against securities, the interest rate may be fixed or floating. If floating, these are linked either to internal or external benchmarks set by the banks. Since 1 October 2019, all new floating-rate loans must be linked to external benchmarks. However, older loans are often tied to internal benchmarks. According to RBI's Annual Report 2024-25, 35.9% of floating-rate loans are still linked to the marginal cost of funds-based lending rate (MCLR), an internal this: How you can get a loan against an insurance policy Home loans are predominantly floating-rate products, while fixed-rate options are also available. Borrowers who took home loans after October 2019 are generally linked to external benchmarks, while older loans may still be tied to MCLR. This distinction is crucial in determining how quickly borrowers benefit from the RBI's latest repo cut. MCLR vs EBLR: how your benchmark affects transmission For loans linked to MCLR, the transmission is typically delayed due to reset cycles, which may occur annually or half-yearly depending on the bank. Even though the RBI provides the formula for calculating MCLR, banks apply their own internal cost structures to arrive at their minimum lending rates. 'While the formula for calculating MCLR is given by the RBI, it is an internal benchmark, which means it will vary across banks. Banks will use their internal costs and calculation of risks to decide their minimum lending rate under MCLR framework. The variables include cost of funds for the banks (deposits), other borrowings, return on net worth, operating costs, tenor premium (longer loan tenor would mean higher risk premium) and negative carry from RBI's cash reserve ratio," explained Joydeep Sen, corporate trainer and author. The CRR, the percentage of deposits banks are required to maintain with the RBI, results in negative carry because these funds typically earn lower returns. Banks are allowed to factor this into their MCLR calculations. By contrast, loans under the external benchmark lending rate (EBLR) regime, most commonly linked to RBI's repo rate, usually see faster transmission. The repo-linked lending rate (RLLR) adjusts more swiftly, typically on a quarterly reset this: How you can get loan against mutual funds without breaking it As the repo-linked lending rate (RLLR) is directly linked to RBI's repo rate, it will usually lead to full quantum of repo cut getting passed onto the borrowers and the transmission is likely to happen faster as the EBLR framework follows quarterly reset cycle. NBFC loans: more flexibility, less transmission certainty For borrowers with loans from non-bank financial companies (NBFCs), the picture is more complex. While NBFCs are regulated by RBI, they are not mandated to follow the benchmark frameworks applicable to banks. 'NBFCs have their internal models to determine their base rates. These rates are influenced by factors such as cost of funds, overhead costs and asset-liability mismatches," pointed out Jagadeesh Mohan, founder of EMI Saver and former PhonePe executive. For NBFCs, assets are the loans they have extended, and liabilities are funds borrowed from banks, debt markets, or depositors. Asset-liability mismatches occur when most borrowings are of short tenure, while loans extended have longer tenures. Also read: How stock market investors can use liquid ETFs to manage cash Additionally, NBFCs can set their own reset frequencies. Existing borrowers may not necessarily benefit from RBI's repo cut, or the impact may be limited depending on the lender's funding costs, competition, and business strategy. 'NBFCs with better credit ratings might be better placed to pass on the benefits of RBI's repo cut due to the lower cost of raising funds on account of their credit rating and better access to funds through their distribution channel," said Abhishek Kumar, a registered investment advisor and founder of SahajMoney.
Time of India
12-06-2025
- Business
- Time of India
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Midcap mutual funds delivered an average return of 18.77% over the past three months, outperforming all equity fund categories. However, investor inflows declined for the second straight month in May, reflecting caution over high valuations and market volatility. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund , the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he should always invest based on their risk appetite, investment horizon, and goals.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
12-06-2025
- Business
- Economic Times
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with ETMutualFunds. Also Read | Mutual fund SIP stoppage ratio slows down to nearly 72% in May There were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three months. In the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund, the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in March. Also Read | Gold ETFs see inflows of Rs 292 crore in May after two straight months of outflows With investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he shared. If you are looking for recommendations, see Best mid cap mutual funds to invest in June 2025One should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Hindustan Times
10-06-2025
- Business
- Hindustan Times
RBI cuts repo rate by 100 bps in 2025, but home loan borrowers may have to wait for full benefit
The Reserve Bank of India (RBI) has cut the repo rate three times this calendar year, with two 25 basis point (bps) reductions in the first two Monetary Policy Committee (MPC) meetings. There were followed by a sharper 50 bps cut in the most recent policy. This brings the total rate cut to 100 bps, signalling the central bank's strong intent to stimulate credit demand and revive economic activity by lowering borrowing costs. This development should come as positive news for home loan borrowers, as it is expected to reduce EMIs, especially for those with floating-rate loans. However, despite the RBI's clear direction, banks and lending institutions often delay or partially pass on the benefits of rate cuts. As a result, many borrowers, particularly those with floating-rate loans, may experience a lag in relief, as the rate transmission is not always immediate or complete. So, it will be a while before the lower rates are passed on to the new borrowers. In fact, the 50 bps cut has not been passed on to new borrowers, and mostly PSU banks have passed on a rate cut of up to 40 bps in some cases. Below is a list of banks that are offering home loan interest rates of 8% or less. 'The lowered CRR limits are expected to boost transmission and new borrowers should also be able to avail low rates soon,' says Adhil Shetty, CEO BankBazaar, a fintech portal. So, it will be a while before reduced home loan rates are passed on to new borrowers, which could be a few days to a week or more. There are reasons behind why it takes time for banks to pass on the rates. Historically, many loans in India have been linked to the Marginal Cost of Funds-Based Lending Rate (MCLR). This system incorporates a bank's internal cost of funds, operational costs, and risk premiums. 'As a result, even when the RBI reduces the repo rate, banks may not immediately revise MCLR since it's based on their own cost structures rather than the RBI's benchmark rate,' says Raoul Kapoor, co-CEO, Andromeda Sales and Distribution. So, if your loan is still linked to the Base Rate or Marginal Cost of Funds-based Lending Rate (MCLR), this rate cut may not benefit you immediately as these benchmarks are slower to respond to policy changes compared to the repo-linked loans that reflect the revision within three months. 'So if you are on an older benchmark, this is the time to consider a switch. A refinance at 100bsp lower will help you save close to ₹4 lakh on a ₹25 lakh outstanding. If you retain your higher EMI, your savings will be even higher,' says Shetty. Also Read: Buying your first home? Netizens say it's like an arranged marriage—Heavy on emotions and financial pressure On the other hand, repo rate-linked loans, introduced more widely in 2019, are directly pegged to the RBI's repo rate. In these loans, any change in the repo rate should be passed on more transparently and quickly, depending on the reset clause. However, not all borrowers have shifted to this model, and many older loans still remain on MCLR or base rate systems. 'Despite these challenges, with a total repo rate cut of 100 basis points this year, there is growing expectation that banks will begin passing on the full benefit to borrowers—especially for home loans. This is also crucial to align with the RBI's objective of stimulating demand and supporting economic growth through monetary easing,' says Kapoor. Once all the benefits are passed on, this is how home loan borrowers will benefit. Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
