With the RBI keeping the repo rate unchanged at 5.25%, FD investors are closely tracking whether banks will continue to offer attractive fixed deposit returns amid rising inflation concerns.
RBI’s decision to hold rates means that it is highly unlikely that there will be any immediate and widespread increase in fixed deposit rates. However, FD investors’ outlook will not just depend on the repo rate.
FD rates are driven by factors such as credit demand, the need to raise funds from deposits, yields of government bonds, competition from small savings schemes, and so on. Hence some lenders could be tempted to increase their deposit rates slightly to garner deposits even when the repo rate doesn’t move.
Rising inflation is a key factor that could support FD rates going ahead. Geopolitical tensions around West Asia have raised fears of disruptions in the oil prices and supply chains. Any increase in fuel and transport costs will lead to higher inflation and could affect the RBI’s policy stance.
Despite the RBI’s pause on repo rates, FDs give relatively attractive returns to risk-averse depositors looking for a stable and fixed income stream. Many small finance banks, private banks and some NBFCs are offering higher FD interest rates with additional benefits for senior citizens.
The RBI move at this juncture seems to be more of a continuation of the existing trend, rather than a complete reversal of the interest rate cycle. But FD investors should continue to receive competitive rates from a number of sources.
| Category | Highest Rate (General) | Highest Rate (Senior Citizen) | Leading Institution |
|---|---|---|---|
| Public Sector Banks | 6.70% p.a. | 7.45% p.a. | Bank of India / PNB |
| Private Sector Banks | 7.25% p.a. | 7.75% p.a. | Bandhan Bank |
| Small Finance Banks | 8.10% p.a. | 8.25% p.a. | Suryoday / Utkarsh SFB |
| NBFCs | 9.10% p.a. | 9.35% p.a. | Muthoot Capital |
| Post Office FD | 7.50% p.a. | 7.50% p.a. | India Post |
(Source: Policy Bazaar | Note: FD rates are as of June 2026 and may change. Rates shown are for retail deposits below Rs. 3 crore.)
| Bank | Best Rate (General Citizens) | Best Rate (Senior Citizens) |
|---|---|---|
| State Bank of India (SBI) | 6.45% p.a. | 7.05% p.a. |
| Bank of Baroda (BoB) | 6.45% p.a. | 7.00% p.a. |
| Punjab National Bank (PNB) | 6.60% p.a. | 7.10% p.a. |
| Bank of India | 6.70% p.a. | 7.45% p.a. |
| Canara Bank | 6.60% p.a. | 7.10% p.a. |
| Union Bank of India | 6.65% p.a. | 7.15% p.a. |
| Punjab & Sind Bank | 6.85% p.a. | 7.35% p.a. |
(Source: Policy Bazaar | Note: FD rates are as of June 2026 and may change. Rates shown are for retail deposits below Rs. 3 crore.)
| Bank | Best Rate (General Citizens) | Best Rate (Senior Citizens) |
|---|---|---|
| HDFC Bank | 6.50% p.a. | 7.00% p.a. |
| ICICI Bank | 6.60% p.a. | 7.10% p.a. |
| Axis Bank | 6.45% p.a. | 7.20% p.a. |
| Kotak Mahindra Bank | 6.80% p.a. | 7.30% p.a. |
| Yes Bank | 7.25% p.a. | 7.75% p.a. |
| Bandhan Bank | 7.25% p.a. | 7.75% p.a. |
| IDFC FIRST Bank | 7.25% p.a. | 7.50% p.a. |
| IndusInd Bank | 7.00% p.a. | 7.75% p.a. |
| RBL Bank | 7.20% p.a. | 7.70% p.a. |
(Source: Policy Bazaar | Note: FD rates are as of June 2026 and may change. Rates shown are for retail deposits below Rs. 3 crore.)
If banks begin to raise FD rates, investors might try to lock in the higher return, particularly for medium-term to long-term deposits. So a staggered approach can help them benefit from any further rate hikes rather than putting all their money in at once.
The higher FD rates can benefit senior citizens and conservative investors in particular. Existing depositors should compare the new rates and decide whether it is worth their while to reinvest, taking into account the penalties involved. The focus should be on safety, on tenure and liquidity needs, not on the highest interest rate on offer.
Priyanka Roshan is a business writer and assistant editor at the NewsX website who tracks everything from stock market swings and corporate earnings to personal finance trends and policy shifts. Known for turning fast-moving business developments into sharp, reader-friendly stories, she combines speed, accuracy, and a data-driven approach to break down complex financial news for everyday audiences.
With over 9.5 years of newsroom experience, Priyanka has worked with leading media organisations, including Moneycontrol, Times Now, and Ping Digital, covering diverse beats such as business, politics, technology, auto, travel, sports, and the world. From live breaking news desks to SEO-led digital storytelling, she specialises in creating engaging content that keeps readers informed without overwhelming them.
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