In June 2025, the Reserve Bank of India (RBI) cut the repo rate by 0.50%. This rate directly affects how banks lend and earn. To adapt, many major Indian banks slashed their savings interest rates—meaning your money now earns less just sitting in your account.
Latest Savings Account Interest Rates (As of June 2025)
| Bank Name | Old Rate (Approx.) | New Rate | Effective From |
|---|---|---|---|
| SBI | 2.70% (< ₹10 Cr) / 3% (≥ ₹10 Cr) | 2.5% for all accounts | June 15, 2025 |
| HDFC Bank | 2.75% (< ₹50 L) / 3.25% (≥ ₹50 L) | 2.75% for all accounts | June 10, 2025 |
| ICICI Bank | 2.75% (< ₹50 L) / 3.25% (≥ ₹50 L) | 2.75% for all accounts | June 12, 2025 |
| Bank of Baroda | Slab-based rates | 2.7% to 4.25% | June 12, 2025 |
| Federal Bank | Slab-based rates | 2.5% to 6.25% | June 17, 2025 |
| IndusInd Bank | Slab-based rates | 3% to 5% | June 16, 2025 |
| RBL Bank | Slab-based rates | 3% to 6.75% | June 16, 2025 |
What Does This Mean for You?
If you’re someone who:
- Keeps large sums in your savings account
- Relies on interest income to help with monthly expenses
- Is planning to save more this year
…then these changes may hit your returns harder than expected.
You’ll now earn less even if you’re saving more. For example, if you had ₹10 lakh in SBI earlier, you might’ve earned ₹30,000 a year. Now, you’d only get ₹25,000. That’s a ₹5,000 drop—without doing anything differently.
So, What Can You Do About It?
Here are some smart next steps to manage your money better in this new environment:
1. Compare Savings Interest Across Banks
Some private banks like Federal, IndusInd, and RBL still offer higher interest rates based on your balance. If you’re comfortable, consider switching or splitting your savings.
2. Explore Safer Alternatives
If you’re only using savings for safety and liquidity, great. But if you’re expecting growth, look at:
- Fixed deposits (short-term and laddered)
- Liquid mutual funds (low-risk, slightly better returns)
- Government-backed savings schemes like PPF, NSC, or Senior Citizens Savings Scheme
3. Track RBI Announcements
Future repo rate cuts can affect not just savings, but also loan EMIs. Stay informed—it helps in both saving and borrowing wisely.