As Reserve Bank of India (RBI) has cut down repo rate by 50 basis points on Friday, triggering a rate cut cycle. Now, there is an expectation that banks would bring down the fixed deposit (FD) interest rates sooner than later.
So, this could be your last chance to lock your savings in fixed deposit if you so wish.
Here, we list out the interest rates offered on long term fixed deposits offered by top seven banks.
These are the interest rates offered on long term FDs
HDFC Bank: As one can see in the table below, HDFC Bank offers 7 percent on two-year FD and 7 percent on three-year FD as well. Senior citizens, meanwhile, are entitled to receive an extra 50 basis points.
ICICI Bank: This private bank offers 7.25 percent on two-year FD and 7 percent on three-year FD. At the same time, senior citizens are entitled to receive an extra 50 basis points.
Kotak Mahindra Bank: This private lender offers 7.15 percent and 7.65 percent on two year and three-year fixed deposits with an extra 50 and 60 basis points for senior citizens, respectively.
Punjab National Bank: This state lender offers 6.8 percent interest on two-year FD and 7 percent per annum on three-year FD. These rates came into force on Jan 1, 2025.
Bank of Baroda: This government lender offers 7 percent and 7.15 percent on two and three year fixed deposits with an extra 50 basis points offered to senior citizens.
Union Bank of India: This state lender offers 6.6 percent on two-year FD and 6.7 percent on three-year FDs with an extra 50 basis points for the senior citizens.
Federal Bank: This bank offers 7.15 percent and 7.1 percent on two year and three-year fixed deposits (FDs) with an extra 50 basis points for senior citizens.
However, it is vital to note that interest income on fixed deposits is taxable. Therefore, it is not advisable to lock too much of your money in these deposits.
“Just because current FD rates are lucrative, do not get tempted to lock a major chuck of your money. They are taxable and in the long run, they fail to generate inflation-hedged returns. So, one should take a proper call as per the required asset allocation of your financial goals,” says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services.
