The Reserve Bank of India (RBI) cut its reporate by 50 basis points on Friday, causing an interest rate reduction cycle. Currently, banks are expected to cut interest rates on time deposits (FDs) faster than delaying.
So this may be your last chance to lock your savings with a fixed deposit if you wish.
Here we list the interest rates offered in long-term fixed deposits offered by the top seven banks.
These are the interest rates offered in long-term FDs
HDFC Bank: As you can see in the table below, HDFC Bank offers 7% for 2-year FDs and 7% for 3-year FDs. Elderly people, on the other hand, are entitled to receive an extra 50 basis points.
ICICI Bank: This private bank offers 7.25% in two-year FDs and 7% in three-year FDs. At the same time, seniors are entitled to receive an extra 50 basis points.
Kotak Mahindra Bank: This private lender will provide 7.15% and 7.65% on 2- and 3-year fixed deposits, adding 50 and 60 basis points to seniors, respectively.
Punjab National Bank: Lenders in this state offer 6.8% interest on two years of FD and 7% per year on three years of FD. These fees came into effect on January 1, 2025.
Bank of Baroda: This government lender offers 7% and 7.15% on fixed deposits for two and three years, providing an additional 50 basis points provided to seniors.
Union Bank of India: The state lender will provide 6.6% in two-year FD and 6.7% in three-year FD, with 50 basis points added to seniors.
Federal Bank: The bank offers 7.15% and 7.1% on 2- and 3-year fixed deposits (FDs), adding 50 basis points to seniors.
However, it is important to note that interest income on fixed deposits is taxable. Therefore, it is not recommended to lock your money too much with these deposits.
“Don’t be tempted to lock your big chucks of your money just because your current FD rate is advantageous. They are taxable and in the long run won’t be able to generate inflation returns. Therefore, you need to make the appropriate calls according to the required asset allocations of your financial targets,” said Preeti Zende, Sebi’s registered investment advisor and founder of Apna Dhan Financial Services.
