In a move that may affect millions of fixed deposit (FD) investors, Bajaj Finance, one of India's largest non-banking financial companies (NBFCs), has reduced its FD interest rates by up to 0.60%. This is the third rate cut by the company in 2025. Alongside this, the extra interest benefit for senior citizens has also been reduced—from 50 basis points (bps) to 35 bps.

This adjustment comes shortly after the Reserve Bank of India (RBI) cut its key policy rate (repo rate) by 50 bps in its latest monetary policy meeting on June 6, 2025.

Bajaj Finance has now become one of the first NBFCs to reduce FD rates following RBI’s policy changes. With the latest revision:

• The highest interest rate offered on FDs (between 24 to 60 months) is now 6.95% per annum.

• For shorter tenures, such as 12 to 14 months, the new rate is 6.60%.

• For durations between 15 to 23 months, the interest rate is 6.75%.

• For senior citizens, the bonus interest has been trimmed to 7.30%, down from the previous 7.45%.

Even after the reduction, the rates remain slightly higher than public sector banks like SBI, which currently offers 6.55% for 3-5 year deposits, making Bajaj Finance still a competitive option.

The rate cut is a direct response to the RBI’s monetary policy changes. On June 6, the RBI’s Monetary Policy Committee (MPC) voted 5:1 in favor of reducing the repo rate by 50 basis points, bringing it down to combat inflation and boost economic activity.

Following the repo rate adjustment, several financial institutions have started revising their interest rates. Bajaj Finance, in particular, has cut FD rates three times in 2025, with a total reduction of 60 basis points so far.

Let’s break down what these changes mean for investors:

If you invest ₹20 lakh in a 5-year FD with Bajaj Finance under the new rates:

This illustrates that even after the rate reduction, investors—especially seniors—can still expect attractive returns from their FDs.

The reduction in FD rates comes as a mixed bag for investors. While returns are slightly lower than before, Bajaj Finance continues to offer better rates than many public sector and private banks. For conservative investors seeking stable income, especially in a low-interest environment, Bajaj FDs remain a viable option.

However, investors are advised to compare FD schemes, consider tax implications, and assess tenure before locking in funds.

Bajaj Finance’s decision to lower FD rates and senior citizen premiums reflects the broader shift in India’s financial landscape following RBI’s policy changes. While the returns may have dipped slightly, the NBFC still maintains an edge over traditional banks in terms of interest rates.

If you’re considering fixed deposits as a part of your portfolio in 2025, now is a good time to review your options, calculate expected returns, and decide accordingly.