The interest rates on fixed deposits (FDs) have been hiked by both public sector and private banks in the past few months. This cycle of raising FD rates by the lenders was started when the Reserve Bank of India (RBI) began increasing the repo rate in May 2022. The RBI raised the repo rate by 50 basis points (bps) to 5.9 per cent in September. There are multiple tenure options in FDs, which range from 7 days to 10 years. Term deposits are considered to be a safe option for investment as they provide assured returns with low-risk. FDs can be beneficial, especially to senior citizens as most banks offer them an additional interest rate of 0.5 per cent per annum (p.a.), or even 0.75 per cent p.a. in some cases.
Various banks such as Indian bank, Punjab National bank, and Central Bank of India have hiked their FD rates.
Here is a list of some of the public sector banks offering high interest rates on FDs (less than Rs 2 crore) maturing in two to three years:
Bank of India
This bank is offering an interest rate of 5.75 per cent on FDs maturing in two years to less than three years (except 777 days) to regular citizens. It is providing a 6.25 per cent interest rate to senior citizens on FDs maturing in the same period. For a tenure of 777 days, the regular public can earn a 7.25 per cent return, while the senior citizens can receive a return of 7.75 per cent.
Union Bank of India
This bank is offering an interest of 6.7 per cent to regular citizens on FDs maturing in two to over three years.
Bank of Baroda
For term deposits maturing between two and three years, this lender gives a return of 5.55 per cent to general citizens and 6.05 per cent to senior citizens.
For FDs with a maturity period of two years and above to three years, the interest offered by this bank to general customers is 6.25 per cent, while senior citizens will get 6.75 per cent.