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May 2025: Key finance updates that could affect your wallet every day
Starting May, changes in banking and taxation could impact your wallet. ATM fees will increase and interest rates on fixed deposits will decrease. It will become easier to withdraw from the state-run pension fund and there will be a new luxury tax. Below is a compilation of all changes that start this month.
ATM withdrawals will be costlier
From May 1, ATM withdrawals beyond the allowed free limit will cost more. The Reserve Bank of India (RBI) has approved a hike in fees from Rs 21 to Rs 23 per transaction after the free limit is exhausted. Kotak Mahindra, HDFC and Punjab National Bank have already hiked their ATM fees.
Most customers get five free ATM transactions per month at their own banks and three to five at other banks, depending on location.
Frequent ATM users, especially in metro cities, will feel the pinch the most.
Commercial LPG is cheaper
In relief to businesses and commercial establishments, the price of a 19-kg commercial LPG cylinder has been reduced. The price was cut by Rs 14.5 in Delhi to Rs 1,747.5. In Kolkata, the price has dropped by Rs 17 to Rs 1,851.50. Cheaper gas will ease the operating costs of food vendors, restaurants, and small enterprises.
Fixed deposit interest rates reduced
If you have fixed deposits (FDs). Several banks have reduced FD interest rates following the RBI's repo rate cut in February 2025.
IDBI Bank is offering a maximum rate of 7 per cent interest per annum
Non-bank lenders have slashed FD rates, too. SFL is now offering up to 9.93 per cent effective yield per annum.
This could impact retirees and conservative savers who depend on FD income.
Pension withdrawals to become easier
Good news for salaried employees: The Employees' Provident Fund Organisation has simplified the process to withdraw provident fund (PF) money. The step means:
Self-declared advances under Para 68B (7) for home improvements
Removal of bank-document uploads and employer approval for seeding bank accounts with Universal Account Number (UAN)
Facial-authentication UAN activation via the UMANG app
Simplified transfer claims with a revamped Form 13
Buying high-end goods just got a bit more expensive. The government has introduced a 1 per cent tax collected at source (TCS) on luxury purchases over Rs 10 lakh.
This includes items such as:
Expensive watches, handbags, and shoes
Art collectibles and antiques
Yachts, helicopters, and high-end home entertainment gear
Interest on Delayed Pensions
For central government pensioners, there's a new safeguard. Banks must now pay 8 per cent annual interest on delayed pension payments.
Pensioners will get this interest automatically, without needing to file a complaint.
This move ensures better financial stability for retirees.
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