Bank of India Cuts in Loan Interest Rates: Bank of India has slashed interest rates across multiple loan categories, making it more affordable to borrow money at a time when household budgets are under pressure.
Bank of India Home Loans Now Start at 7.35%
- The home loan interest rate has been reduced by 0.50%
- New rate: Starting from 7.35% per annum
- This is applicable to both new and existing borrowers
- Your exact rate will depend on your CIBIL score
Why it matters:
If you’re planning to buy a home, this change could save you thousands in interest payments over the loan’s lifetime.
Education Loans at 7.5% for Quality Institutions
Students aiming to study at reputed colleges in India can now apply for an education loan at just 7.5% interest per year.
Whether you’re pursuing engineering, management, or medical studies — this lower rate makes higher education more accessible.
Lower Rates on Car and Other Retail Loans
The bank has also reduced interest on several personal and vehicle loans:
- Car loan interest rate: Now lower by 50 basis points
- Applies to other retail loan products too
This could help middle-class families afford vehicles or manage short-term needs with less financial pressure.
Minimum Balance Charges Scrapped on Savings Accounts
In one of the most customer-friendly moves, Bank of India has removed the penalty for not maintaining the minimum balance in savings accounts.
Here’s what it means for you:
- No charges, even if your balance falls below the earlier threshold
- Applies to all savings account holders
- Effective from July 7, 2025
If you’re someone who often struggles to maintain a fixed balance — this is real relief without worrying about surprise deductions.
Update on Green Deposit Scheme and Savings Interest
Some deposit interest rates have also been adjusted:
| Scheme | Old Rate | New Rate | Applies To |
|---|---|---|---|
| Green Deposit (999 days) | 7.0% | 6.7% | ₹1 lakh to ₹10 crore |
| Savings Account (≤ ₹1 lakh) | 2.75% | 2.5% | General savings deposits |
| Savings (above ₹1 lakh) | No change | — | Rate remains the same |
These changes reflect the broader trend of falling deposit rates, in line with recent RBI policy direction.
Why Is Bank of India Making These Changes?
According to the bank, these updates are part of a broader strategy to:
- Align with the RBI’s recent rate easing
- Encourage credit growth
- Improve the overall customer experience
It’s a move aimed at helping people spend, borrow, and save smarter — without the hidden costs that make banking frustrating for everyday users.
Quick Summary: What’s Changed?
| Feature | New Update | Effective From |
|---|---|---|
| Home Loan Interest | Starts at 7.35% | July 7, 2025 |
| Education Loan | 7.5% per annum | July 7, 2025 |
| Car & Retail Loans | 0.50% cheaper | July 7, 2025 |
| Savings A/c Penalty | Removed | July 7, 2025 |
| Green Deposit Rate | Cut to 6.7% | July 7, 2025 |
| Savings A/c Interest (≤ ₹1L) | Now 2.5% | July 7, 2025 |
Frequently Asked Questions (FAQs)
Q1: Do existing home loan customers benefit from the new interest rate?
Yes, Bank of India confirmed the rate cut applies to both new and existing borrowers, depending on loan terms and credit score.
Q2: Will all savings account holders get zero penalty?
Absolutely. From July 7, all minimum balance penalties are removed — regardless of account type.
Q3: What is the Green Deposit Scheme?
It’s a special 999-day deposit plan encouraging sustainable investment. The interest is now 6.7% per annum.
Q4: Are these changes permanent?
These changes are currently effective, but interest rates can change depending on RBI policy and market conditions.
