The Reserve Bank of India (RBI) has reduced the repo rate twice this year, once in February and again in April — a total cut of 50 basis points. As a result, almost all banks, especially public sector banks, have lowered the interest rates on their Fixed Deposits (FDs).
With inflation showing signs of easing, experts believe that the RBI may go for another rate cut in June.
🏦 Why It Makes Sense to Invest in FD Now?
If you are planning to invest in a Fixed Deposit, doing it before June could be a smart move. Here’s why:
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Once you book an FD, the interest rate is locked in.
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Even if the market rates go down later, you’ll continue to earn the agreed interest for the entire term — whether it’s for 1 year or 5 years.
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Experts say that as rates fall further, returns on FD will also drop, making today’s rates more attractive.
📊 Current FD Interest Rates – Top PSU Banks (as of May 2025)
Despite falling market rates, some government banks are still offering solid returns on 1–2 year FDs for regular customers:
| Bank | Interest Rate (1–2 years) |
|---|---|
| Bank of Maharashtra | 7.25% |
| Bank of Baroda | 7.30% |
| Canara Bank | 7.25% |
| Central Bank of India | 7.30% |
| Indian Bank | 7.30% |
| Indian Overseas Bank | 7.30% |
| State Bank of India (SBI) | 7.05% |
| UCO Bank | 7.30% |
| Union Bank of India | 7.15% |
👵🏻 Higher Returns for Senior Citizens
Senior citizens get even better FD rates. Some banks are offering up to 7.75% for 1–2 year tenures:
| Bank | Senior Citizen Rate |
|---|---|
| Bank of Maharashtra | 7.75% |
| Punjab & Sind Bank | 7.75% |
| UCO Bank | 7.55% |
| Bank of India | 7.55% |
| Union Bank of India | 7.40% |
| Indian Overseas Bank | 7.40% |
📌 4 Things to Keep in Mind Before You Invest in FD
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Choose the FD tenure wisely: Locking current high rates for longer is better.
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Check the bank’s rating: PSU banks are generally safer, but always be cautious.
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Explore senior citizen schemes: They offer higher interest.
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Enable auto-renewal: So your money doesn’t lie idle after maturity.
📉 Invest Soon – Rates May Fall Further
If the RBI cuts rates again in June, today’s FD rates might soon be history. So, if you want stable and guaranteed returns, now is the right time to lock in your investment.
