FD Interest Rates Revised! This Government Bank Offers Best Returns Now
Fixed deposit investors have something new to look at as Canara Bank updates its interest rates, favouring shorter and mid-length tenures, especially for senior citizens. The updated rates are now in effect and stand out at a time when overall deposit returns are under pressure.
Despite a soft interest rate environment, Canara Bank is offering up to 7 percent interest on callable FDs for senior citizens, placing it among the better options currently available in the public sector banking space.
Under the revised structure, special tenure deposits are proving more attractive than traditional long-term FDs. According to available details, a 555-day FD now earns 6.50% interest for general customers, while senior citizens get 7.00%, the highest callable rate on offer.
Similarly, a 444-day FD offers 6.45% for general customers and 6.95% for senior citizens. These short- to mid-term options are currently delivering better returns than deposits locked in for longer periods.
Longer Tenures Lose Their Edge
For most callable FD tenures beyond one year, interest rates have been capped at 6.25% for general customers and 6.75% for senior citizens. This effectively removes the earlier advantage of locking funds in long-term deposits, as longer durations no longer fetch higher returns.
Why FD Rates Are Softening
The revision comes against the backdrop of the Reserve Bank of India’s ongoing monetary easing. Since last year, the RBI has cut the repo rate by 125 basis points, including a recent 25 basis point cut that brought the key policy rate down to 5.25%.
Lower policy rates reduce banks’ funding costs, prompting them to gradually trim deposit rates particularly on long-term FDs. As a result, FD returns across banks have been declining, with multi-year deposits seeing the sharpest impact.
What This Means for Depositors
For investors, especially senior citizens, the message is clear: short- and mid-term FDs currently offer better value than long-term locks. With rates unlikely to rise in the near term, choosing the right tenure has become just as important as choosing the right bank.
Despite a soft interest rate environment, Canara Bank is offering up to 7 percent interest on callable FDs for senior citizens, placing it among the better options currently available in the public sector banking space.
What’s Changed in Canara Bank FD Rates
Under the revised structure, special tenure deposits are proving more attractive than traditional long-term FDs. According to available details, a 555-day FD now earns 6.50% interest for general customers, while senior citizens get 7.00%, the highest callable rate on offer.
Similarly, a 444-day FD offers 6.45% for general customers and 6.95% for senior citizens. These short- to mid-term options are currently delivering better returns than deposits locked in for longer periods.
Longer Tenures Lose Their Edge
For most callable FD tenures beyond one year, interest rates have been capped at 6.25% for general customers and 6.75% for senior citizens. This effectively removes the earlier advantage of locking funds in long-term deposits, as longer durations no longer fetch higher returns. Why FD Rates Are Softening
The revision comes against the backdrop of the Reserve Bank of India’s ongoing monetary easing. Since last year, the RBI has cut the repo rate by 125 basis points, including a recent 25 basis point cut that brought the key policy rate down to 5.25%.Lower policy rates reduce banks’ funding costs, prompting them to gradually trim deposit rates particularly on long-term FDs. As a result, FD returns across banks have been declining, with multi-year deposits seeing the sharpest impact.
What This Means for Depositors
For investors, especially senior citizens, the message is clear: short- and mid-term FDs currently offer better value than long-term locks. With rates unlikely to rise in the near term, choosing the right tenure has become just as important as choosing the right bank. Next Story