The reduction in repo rate by the Reserve Bank of India has benefited the loan takers, but some people will also suffer losses. This is especially bad news for those who have FD in the bank. Along with reducing the interest rates of the loan, the banks are also reducing the return rate of FD. The latest example of this can be seen in the State Bank of India (SBI) and Bank of India (BOI).

These banks have reduced the interest rates of some selected FDs from April 15. This will have a direct impact on those investors who consider FD as a safe source of income. This is even more worrying for senior citizens because a large part of their monthly income depends on interest.

Recently, the Monetary Policy Committee (MPC) of RBI cut the repo rate by 25 basis points, bringing it to 6 percent. A total of 50 basis points have been cut in the last two months. As a result, interest rates on bank deposits have started falling. While loan borrowers will get relief, economists say that investors' earnings will decrease.

SBI cuts rates on 1 to 3-year FDs-
The country's largest bank SBI has cut rates by 10 basis points on FDs with tenures of less than 1 year and less than 3 years. Now FDs of less than 1 year and 2 years will get 6.7% interest and FDs of 2 to 3 years will get 6.9% interest. Earlier, both of these were getting 6.8% and 7% interest respectively. Interest rates for senior citizens have also come down by 0.1%. SBI also closed its special FD scheme called Amrit Kalash on March 31, which used to give 7.1% interest for 400 days.

If a senior citizen makes an FD of ₹10 lakh in State Bank of India (SBI) for one year, earlier he used to get ₹73,000 annual interest at the rate of 7.3%. But now after the new rate of 7.2%, he will get only ₹72,000, that is, an annual loss of ₹1,000. If the same FD was for two years, then at the old rate of 7.5%, he would have got ₹1,50,000 interest, which will now be reduced to ₹1,48,000 at 7.4% - that is, a loss of ₹2,000.

Bank of India also reduced interest rates-
Bank of India has also changed the FD rates. FDs of 91 to 179 days will now get 4.25% (earlier 4.5%) and FDs of less than 180 days and one year will get 5.75% (earlier 6%). However, the rate of 1-year FD has been increased to 7.05%, which was 6.8% earlier. BOI has also discontinued its 400-day high-interest rate FD scheme.

Disadvantages-
Similarly, the Bank of India (BoI) has reduced FD rates from 6 percent to 5.75 percent for 180 days to one year. If a customer makes an FD of Rs 5 lakh for 1 year, earlier he used to get ₹30,000, but now he will get only ₹28,750 - a direct loss of ₹1,250. This means that even a slight reduction in interest rates has a clear impact on the earnings of customers, especially when the FD amount is large and the tenure is long.

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