With the start of June 2025, major public sector banks Punjab National Bank (PNB) and Canara Bank have revised their fixed deposit (FD) interest rates across tenures, in response to evolving market conditions and the Reserve Bank of India’s (RBI) latest monetary policy signals.
The updated FD rates reflect slight tweaks aimed at maintaining a balance between deposit mobilization and lending margins.
For investors seeking stable returns and capital safety, these revised FD rates present an opportunity to reassess and realign their fixed-income strategy.
RBI Repo Rate Cut June 2025: Impact on Loans, EMIs, FD Returns & Economy Explained.
Punjab National Bank (PNB) – Revised FD Interest Rates (Effective June 1, 2025)
PNB has made moderate adjustments to its term deposit rates, mainly affecting short- and mid-term tenures. The bank continues to offer competitive rates to both regular customers and senior citizens.
PNB FD Rates for General Public:
- 7 to 45 days: 3.50%
- 46 to 90 days: 4.50%
- 91 to 179 days: 5.50%
- 180 days to 1 year: 6.00%
- 1 year to 443 days: 6.75%
- 444 days (special tenure): 7.00%
- 445 days to 2 years: 6.50%
- 2 years to 3 years: 6.60%
- Above 3 years to 10 years: 6.50%
PNB Senior Citizen FD Rates:
Senior citizens enjoy an additional 0.50% interest across tenures. The highest return is 7.50% on the special 444-day scheme.
Key Highlight:
The 444-day special FD continues to be PNB’s most attractive offering, appealing to medium-term investors seeking higher returns without locking in funds for too long.
Canara Bank – Revised FD Interest Rates (Effective June 1, 2025)
Canara Bank has also revised its fixed deposit rates across various maturities, with minor reductions on long-term deposits and some upward tweaks on shorter durations to remain competitive in the market.
Canara Bank FD Rates for Regular Depositors:
- 7 to 45 days: 4.00%
- 46 to 90 days: 4.75%
- 91 to 179 days: 5.50%
- 180 days to less than 1 year: 6.10%
- 1 year to less than 2 years: 6.85%
- 2 years to less than 3 years: 6.70%
- 3 years to less than 5 years: 6.60%
- 5 years and above: 6.50%
Senior Citizen Rates:
Senior citizens are offered an additional 0.50%, with the highest rate being 7.35% on 1–2 year FDs.
Special FD Scheme:
Canara Bank continues its focus on the 666-day tenure with a revised rate of 7.00% for general public and 7.50% for senior citizens.
How These Changes Impact FD Investors
These revised FD interest rates from PNB and Canara Bank reflect a calibrated approach amid global inflation concerns, stable domestic macroeconomic indicators, and cautious monetary policy.
While the repo rate has remained unchanged in the RBI’s latest review, banks are adjusting deposit rates based on liquidity needs, credit demand, and competition.
Implications for Investors:
- Short-Term FDs (up to 1 year): Slight upward revisions in short-tenure FDs indicate that banks are encouraging shorter-term deposits.
- Medium-Term FDs (1–2 years): These tenures remain the sweet spot, offering the highest interest rates in both banks.
- Senior Citizens: Continue to enjoy enhanced returns across all durations, making FDs an attractive option for retirement planning.
Should You Lock Into FDs Now?
With banks still offering attractive returns—especially in the 1–2 year tenure—this could be a good time to lock in rates before potential further rate adjustments.
Investors with idle cash and a low-risk appetite may consider laddering FDs across different tenures to balance liquidity and yield.
Here’s what to keep in mind:
- Compare special tenure schemes like PNB’s 444-day and Canara Bank’s 666-day options.
- Match FD tenure with your financial goals to avoid premature withdrawal penalties.
- Evaluate tax-saving FDs for 5-year terms if you’re also looking for Section 80C benefits.
Conclusion
The revised FD rates from June 1, 2025, by PNB and Canara Bank reflect ongoing recalibrations within the banking sector amid stable but cautious monetary conditions.
While some tenures have seen minor tweaks, both banks continue to offer competitive returns, especially in mid-term fixed deposits and senior citizen schemes.
As always, depositors are advised to compare rates, review tenure-specific offerings, and align investments with their individual financial goals and risk profiles.
With inflation under control and credit demand stabilizing, FDs remain a reliable choice for conservative investors looking for assured returns in uncertain times.