If you're looking for a safe and guaranteed way to grow your savings, Fixed Deposits (FDs) remain one of the most reliable options. They not only offer fixed returns but also ensure that your investment is secure for a pre-determined period. That’s why a large section of conservative investors in India continues to prefer bank FDs over other market-linked instruments.
FDs are particularly appealing for those who don’t want to take risks in mutual funds or the stock market but still want assured earnings over time. With interest rates on the rise in recent years, several banks—especially government-owned ones—are now offering highly competitive rates on fixed deposits.
In this article, we’ll walk you through the current interest rates offered by India’s two largest public sector banks, along with a broader look at other banks providing attractive FD returns. This will help you decide where to park your money for maximum benefit.
Guaranteed Returns: Unlike stocks or mutual funds, FDs give fixed interest regardless of market conditions.
Capital Protection: Your principal amount is completely safe unless withdrawn prematurely.
Flexible Tenures: Most banks offer FDs ranging from 7 days to 10 years.
Loan Facility: You can also avail of a loan against your FD without breaking it.
Let’s look at the FD interest rates from State Bank of India (SBI) and Punjab National Bank (PNB)—the country’s two largest government banks.
| Tenure | Regular Citizens | Senior Citizens |
|---|---|---|
| 7 days to 45 days | 3.00% | 3.50% |
| 46 days to 179 days | 4.50% | 5.00% |
| 180 days to 210 days | 5.25% | 5.75% |
| 1 year to 2 years | 6.80% | 7.30% |
| 2 years to 3 years | 7.00% | 7.50% |
| 5 years and above | 6.50% | 7.00% |
| Tenure | Regular Citizens | Senior Citizens |
|---|---|---|
| 7 days to 45 days | 3.50% | 4.00% |
| 46 days to 179 days | 4.75% | 5.25% |
| 180 days to 210 days | 5.50% | 6.00% |
| 1 year to 2 years | 7.00% | 7.50% |
| 2 years to 3 years | 7.25% | 7.75% |
| 5 years and above | 6.75% | 7.25% |
Among the major public sector banks, Punjab National Bank currently offers slightly higher interest rates than SBI across most tenures. For example, on a 2-year FD, PNB offers 7.25% interest to general depositors and 7.75% for senior citizens, which is marginally higher than SBI.
Private sector banks and small finance banks like AU Small Finance Bank, Equitas Small Finance Bank, and IDFC First Bank are also offering rates between 7.5% to 8.5%, but they may carry higher risk compared to nationalized banks. Therefore, it’s essential to balance returns with safety while making your decision.
Bank FDs remain a smart choice for risk-averse investors, especially seniors who rely on steady income. With multiple tenure options and assured returns, they can be an essential part of your financial planning strategy.
Before you invest, always compare FD interest rates across different banks and consider factors like premature withdrawal penalties, compounding frequency, and taxation.
Choosing the right FD can help you earn better returns while keeping your hard-earned money safe.
