Archive · 14 Sep 2026
PSU Bank FD Rates Below 7% as Rivals Offer More
Public-sector banks offer fixed deposits with regular interest rates below 7%.
Bank of Baroda has the highest maximum regular rate among the listed public-sector banks at 6.75%.
For a one-year deposit, Bank of India and Indian Overseas Bank offer 6.50%.
A ₹5 lakh deposit at 6.50% would earn about ₹32,500 in simple yearly interest before taxes.
The same deposit at 6.25% would earn about ₹31,250.
Senior citizens generally receive higher rates at these banks.
Other banks and finance companies advertise higher maximum rates than most public-sector banks.
Small finance banks offer some of the highest rates, with Suryoday Small Finance Bank reaching 8.25%.
Investors should compare the rate for the exact deposit period rather than only the highest advertised rate.
Among the listed public-sector banks, regular fixed-deposit rates peak at 6.75% at Bank of Baroda.
For one-year deposits, Bank of India and Indian Overseas Bank lead at 6.50%.
Bank of Baroda, Punjab National Bank and State Bank of India offer 6.25% for one-year deposits.
Senior citizens receive higher maximum rates, led by Bank of India at 7.45%.
Private banks, small finance banks and NBFCs offer higher maximum rates, reaching 8.25% at Suryoday Small Finance Bank.
- Who
- Investors, public-sector banks, private banks, small finance banks and non-banking finance companies.
- What
- A comparison of fixed-deposit interest rates, including regular and senior-citizen rates.
- When
- The article does not specify a publication date; the compared rates apply to the tenures listed.
- Where
- India.
- Why
- To show how public-sector bank fixed-deposit rates compare with higher offers from other financial institutions.
Yield-focused investors
Conservative depositors
Choosing the highest rate
Yield-focused investors
Investors seeking higher returns may consider private banks, small finance banks or NBFCs, whose listed maximum rates exceed most public-sector bank rates.
Conservative depositors
Investors may prefer public-sector bank fixed deposits despite lower headline rates, prioritising the bank profile and predictable fixed-income returns.
Comparing deposit offers
Yield-focused investors
The highest advertised rate can make an institution appear more attractive, with small finance banks reaching 8.25%.
Conservative depositors
Investors should examine the exact tenure because each bank’s maximum rate may apply only to a particular maturity.
- Highest regular PSU rate
- Bank of Baroda offers up to 6.75% for 555 days.
- Highest one-year PSU rates
- Bank of India and Indian Overseas Bank offer 6.50%.
- Lower one-year PSU rate
- Bank of Baroda, Punjab National Bank and State Bank of India offer 6.25%.
- Highest senior-citizen PSU rate
- Bank of India offers up to 7.45% for three years.
- Illustrative ₹5 lakh return
- At 6.50%, simple annual interest is approximately ₹32,500 before taxes.
- Highest listed rate overall
- Suryoday Small Finance Bank offers up to 8.25% to regular depositors.
- Selected NBFC rates
- Shriram Finance offers up to 7.50%, Mahindra Finance 7.45% and Bajaj Finance 7.40%.