FD Rates: The Reserve Bank of India (RBI) cut the repo rate by 0.25% i.e. 25 basis points on 9 April 2025. A total of 0.50% has been cut since February 2025. Its effect is clearly visible on the fixed deposit (FD) schemes of banks. Most banks have reduced the interest rates of FDs. Due to this, those investors who prefer low-risk investments, especially senior citizens, whose source of income is FDs, have suffered a setback.
Not only this, many banks have also discontinued their special tenure FDs like SBI’s Amrit Kalash and Bank of India’s 400-day scheme. But the good thing is that some banks are still offering good interest rates on 3-year FDs, which is a matter of relief for common investors and senior citizens.
Which banks are offering the best interest rates?
1. Equitas Small Finance Bank
General public: 7.75%, Rs 1 lakh will become Rs 1.26 lakh
Senior Citizen: 8.25%, Rs 1 lakh will become Rs 1.28 lakh
2. AU Small Finance Bank
General public: 7.5%, Rs 1 lakh will become Rs 1.25 lakh
Senior Citizen: 8%, Rs 1 lakh will become Rs 1.27 lakh
3. Canara Bank
General public: 7.2%, Rs 1 lakh will become Rs 1.24 lakh
Senior Citizen: 7.7%, Rs 1 lakh will become Rs 1.26 lakh
4. Bank of Baroda
General public: 7.15%, Rs 1 lakh will become Rs 1.24 lakh
Senior Citizen: 7.65%, Rs 1 lakh will become Rs 1.26 lakh
5. HDFC, ICICI and Axis Bank
General public: 6.9%, Rs 1 lakh will become Rs 1.23 lakh
Senior citizens: 7.4%, Rs 1 lakh will become Rs 1.25 lakh
6. State Bank of India (SBI) and Punjab National Bank (PNB)
General public: 6.75%, Rs 1 lakh will become Rs 1.22 lakh
Senior citizens: 7.25%, Rs 1 lakh will become Rs 1.24 lakh
7. Union Bank of India
General public: 6.7%, Rs 1 lakh will become Rs 1.22 lakh
Senior citizens: 7.2%, Rs 1 lakh will become Rs 1.24 lakh
8. Bank of India
General public: 6.5%, Rs 1 lakh will become Rs 1.21 lakh
Senior citizens: 7%, Rs 1 lakh will become Rs 1.23 lakh Rs
9. Indian Bank
General public: 6.25%, Rs 1 lakh will become Rs 1.20 lakh
Senior Citizen: 6.75%, Rs 1 lakh will become Rs 1.22 lakh
Who should invest?
If you want safe and fixed returns by investing in FD, then Equitas and AU Small Finance Bank are currently paying the highest interest. These banks are paying more than 8% interest for senior citizens, which can be a good option in the current environment. Interest rates can change, so before investing, definitely get the latest information from the bank’s website or branch. The interest received on bank FD is taxable.
The benefit of additional interest for senior citizens will be available only to those who are 60 years of age or above. If you are looking for safe investment with guaranteed returns, then 3-year FD schemes of small finance banks are still a good option.
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