Fixed Deposit Rate Hike in June 2025 : Are you looking to grow your savings with a secure, fixed-return investment? Great news — as of June 1, 2025, Punjab National Bank (PNB) and Canara Bank have revised their fixed deposit (FD) interest rates. These updates could make a noticeable difference in your returns, especially for mid- to long-term investors.
In this article, we’ll break down:
- The latest FD interest rates from PNB and Canara Bank
- What general and senior citizens can earn by tenure
- New tips for maximizing your FD returns in 2025
Let’s dive into the details.
🏦 What’s New in FD Interest Rates from June 2025?
Both PNB and Canara Bank, two leading public sector banks in India, have made interest rate adjustments effective June 1, 2025. These revised rates apply to retail fixed deposits below ₹3 crore.
The new rates reflect a shift in the banking sector’s response to inflation trends and monetary policy cues. While some tenures have seen a modest drop, others — especially medium-term FDs — now offer more competitive returns.
💰 PNB’s Revised FD Interest Rates (Effective June 1, 2025)
Punjab National Bank is now offering interest rates ranging from 3.50% to 6.90% per annum for general customers. Senior citizens get an additional 0.50% across all tenures.
📊 PNB FD Rates for General Citizens (Below ₹3 Crore)
| Tenure | Interest Rate (p.a.) |
|---|---|
| 7 to 45 days | 3.50% |
| 46 to 90 days | 4.50% |
| 91 to 179 days | 5.50% |
| 180 to 270 days | 6.00% |
| 271 to 303 days | 6.15% |
| 304 days to < 1 year | 6.25% |
| 1 year | 6.70% |
| Above 1 year (varies) | Up to 6.90% |
💡 Senior Citizens: Add 0.50% to these rates for higher returns.
🔍 Example
If you’re a senior investing ₹5 lakh in a 1-year FD, you’d earn:
- 6.70% + 0.50% = 7.20% annually, which equals around ₹36,000 in interest.
🏛️ Canara Bank’s Updated FD Rates (Effective June 1, 2025)
Canara Bank now offers 4.00% to 7.00% interest per annum for general depositors. Senior citizens again enjoy a bonus 50 bps (0.50%) on all tenures.
📊 Canara Bank FD Rates for General Citizens
| Tenure | Interest Rate (p.a.) |
|---|---|
| 7 days to 1 year | 4.00% – 6.75% |
| 1 year (exact) | 6.75% (reduced from 6.85%) |
| 444 days (special) | 7.00% (highest) |
| 1–2 years | 6.85% |
| 2–3 years | 6.90% |
| 3–5 years | 6.75% (down from 7%) |
| 5–10 years | 6.70% |
🧓 Senior Citizens: Eligible for up to 7.50% on the 444-day special FD
✅ Tips to Maximize Your FD Returns in 2025
Whether you’re a first-time depositor or a seasoned saver, here are smart strategies to get the most from your FD:
1. Ladder Your FDs
Break your deposit into multiple tenures. This way, you can reinvest maturing FDs at potentially higher rates if market rates rise.
2. Use Senior Citizen Schemes
If you’re above 60, don’t settle for less. Always ask for the senior citizen rate — it can add ₹5,000–₹10,000 extra per year depending on your deposit amount.
3. Compare Across Banks
While PNB and Canara offer solid rates, private and small finance banks might offer even more for certain tenures. Compare before committing.
4. Special Tenure Deals
Watch for unique durations like 444-day FDs — they often carry limited-time promotional rates that beat standard offerings.
📉 What to Watch Out For
- Taxation: FD interest over ₹40,000 (₹50,000 for seniors) is taxable and subject to TDS. Consider splitting deposits or using tax-saving FDs.
- Inflation Risk: Long-term FDs may underperform if inflation outpaces your interest rate. Reevaluate every year.
- Premature Withdrawal Penalty: Check terms carefully — early exits could reduce your gains by 0.5% to 1%
✍️ Final Thoughts: Is Now the Right Time to Invest in FDs?
With PNB and Canara offering up to 7% interest (and even more for seniors), FDs remain a safe and predictable option for conservative investors. While market-linked instruments offer higher returns, FDs deliver peace of mind and fixed income.
If you’re looking for stable growth without risk, locking in at current rates — especially for special tenures like 444 days — could be a smart move.
📌 Key Takeaways
- PNB FD rates now go up to 6.90% for general, 7.40% for seniors.
- Canara Bank’s highest offering is 7% (7.50% for seniors) for 444 days.
- FDs are ideal for conservative investors, but watch inflation and tax.
- Use strategies like FD laddering and tenure targeting to boost gains.
