Now the eyes of banks and investors are fixed on the monetary policy meeting of the Reserve Bank of India (RBI) in December 2025.
After the unexpected fall in CPI Inflation, economists are now hopeful that RBI may make another repo rate cut.
Inflation at 14 year low – rate cut expected in December
Consumer Price Index (CPI) based inflation was only 0.3% in October 2025,
Which is significantly lower than September’s 1.4% and the lowest level in the 2011-12 base series.
According to Crisil –
“Due to the fall in food prices, food supply situation due to good monsoon and low crude oil prices.
“The average inflation rate in the current financial year is likely to be 2.5%, which is much lower than last year’s 4.6%.”
This decline has given scope to RBI to reduce the interest rate in the December 2025 policy.
How much can be the repo rate cut?
According to ICRA Chief Economist Aditi Nair,
“If GDP growth does not increase more than expected, RBI may reduce the December policy by 25 basis points (0.25%).”
Currently the repo rate is at 6.25%,
And if it is reduced by 0.25%, the new rate will be 6.00%.
Impact on FD and savings account
If RBI reduces the repo rate, it will have a direct impact on bank deposit and loan rates.
👉 Effect on savings account:
Saving account interest rates of banks may gradually decrease.
At present, most of the big banks are giving interest ranging from 3% to 3.5%, which can come down to 2.75%-3%.
👉 Impact on Fixed Deposit (FD):
New FD rates may decrease after the rate cut.
Investors who want to invest in long term fixed deposits,
They can lock in higher interest rates by investing before the December policy.
Best FD rates from banks currently (till November 2025)
Bank Name Interest Rate (General Citizen) Tenure for Senior Citizens Yes Bank 7.50% 8.00% 18 months – 24 months RBL Bank 7.60% 8.10% 2 to 3 years HDFC Bank 7.25% 7.75% 2 to 5 years ICICI Bank 7.10% 7.60% 1 to 3 years SBI (State Bank of India) 7.00% 7.50% 2 to 3 years IDFC First Bank 7.75% 8.25% 500 days FD Axis Bank 7.10% 7.60% 2 to 3 years
(Data: Banks’ websites, till November 2025)
advice for investors
Open an FD before the repo rate cut — so that you can benefit from the current higher rates.
Invest in long term FDs — 2–3 year tenure is most beneficial right now.
Best time for senior citizens – This time is suitable for investment as 0.5% additional interest is available.
Do not keep excess funds in savings account — interest is likely to decline.
