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Fixed Deposits (FDs) continue to be a reliable investment choice for individuals looking for steady returns with minimal risk, particularly appealing to senior citizens and risk-averse investors. In 2025, many government-owned Public Sector Undertaking (PSU) banks are offering attractive interest rates, making FDs a preferred option during times of market uncertainty.
If you prefer a low-risk approach to growing your savings, there’s positive news. Many top public sector banks in India have recently increased their fixed deposit interest rates. This presents a timely opportunity to secure better returns while enjoying the safety and credibility of government-backed institutions.
What are PSU Banks?
Public Sector Undertakings (PSUs) Banks are financial institutions in which the Government of India holds a majority stake, typically over 50%. These banks are overseen by the Ministry of Finance and function under the regulatory framework set by the Reserve Bank of India (RBI).
Features of PSU Banks in India
- Government Backing: With the central government owning a majority stake, PSU banks enjoy high credibility and public confidence.
- Extensive Network: These banks have a widespread presence in both rural and urban areas, promoting easy access to banking services nationwide.
- Trusted Institutions: Being government-backed, PSU banks are often viewed as secure options for savings and fixed deposits.
- Promoters of Inclusion: They play a vital role in implementing financial inclusion initiatives like Jan Dhan Yojana, PM Kisan, and Direct Benefit Transfers (DBT).
- Safe and Consistent: While returns may not be the highest, PSU banks are valued for their reliability and long-term stability.
List of Latest Government Bank FD Returns June 2025
| Bank Name | General Rate | Senior Citizen Rate | Tenure Range |
| Punjab & Sind Bank | Up to 7.05% for 444 days (special) | Up to 7.55% for 444 days | 7 days to 10 years |
| Bank of Baroda | Approx. 7.10% on select FDs | Up to 7.80% on preferred terms | 1 to 5 years (varies) |
| Union Bank of India | – | Up to 7.75% for senior citizens | 1 to 5 years |
| Canara Bank | Revised post-June 1: ~6.8% to 7.0% | ~7.3% to 7.5% (0.50% higher) | Various flexible options |
| Bank of India | Around 7.00% | Up to 7.75% | 1 to 5 years |
| Indian Bank | 7.65% under IND SECURE (444 days) | 7.65% under the same scheme | Fixed: 444 days (special) |
| Punjab National Bank | Up to 8.25% for selected durations | ~0.50% higher for seniors | Long-term: up to 5 years |
| State Bank of India | Max 6.75% | Up to 7.10% | Up to 5 years |
| UCO Bank | Rates not clearly updated; approx. like SBI/PNB | Typically 0.50% extra for seniors | – |
| Central Bank of India | Not fully detailed for the general public | Estimated 7.25%–7.75% for seniors | Multiple tenures available |
Highlights from the above Table
- Punjab & Sind Bank: Offers a special 444-day FD with 7.05% interest for general customers and 7.55% for senior citizens. Regular FD rates range from 3.50% to 7.05% for general and 3.50% to 7.55% for seniors, across tenures from 7 days to 10 years.
(Source: punjabandsindbank.co.in, paisabazaar.com, outlookmoney.com) - Bank of Baroda: Offers senior citizen rates up to ~7.80%, and around 7.10% for regular customers on popular durations.
- Union Bank, Bank of India, PNB: These banks offer some of the highest senior citizen FD rates, ranging between ~7.75% to 8.25% for 1 to 5-year tenures.
- Indian Bank: Its IND SECURE 444-day FD scheme provides a flat 7.65% interest rate for all investors and is available until September 30, 2025.
- Canara Bank & PNB: Revised FD rates took effect from June 1. Canara Bank has reduced some rates, while PNB has increased rates for long-term deposits.
(Source: economictimes.indiatimes.com) - SBI: Following the June 16 revision, the maximum senior citizen FD rate is approximately 7.10%.
(Source: outlookmoney.com) - Central Bank of India & Others: Offering senior citizen FD returns in the range of ~7.25% to 7.75% for mid-term tenures.
Why should you choose Fixed Deposits for Investment?
- Assured and Predictable Returns
FDs provide a fixed rate of return that is unaffected by market volatility. This makes them a reliable choice for investors who want guaranteed income without exposure to the ups and downs of equity or debt markets. - Low-Risk Investment Option
Especially with Public Sector Undertaking (PSU) banks, FDs are considered one of the safest avenues for investment. Being regulated and backed by the government, they offer a high level of security for your capital. - Tenure Flexibility to Match Financial Needs
Whether you need short-term liquidity or are planning for long-term goals like retirement or children’s education, FDs offer flexible durations ranging from a few days to several years. - Extra Interest Benefits for Senior Citizens
Most banks offer an additional interest rate—usually 0.50% more—for senior citizens. This makes FDs particularly appealing for retirees looking to earn steady, risk-free income.
Final Thoughts
If you’re seeking secure, low-risk returns in 2025, Fixed Deposits in PSU banks remain a reliable option, particularly for short- to medium-term financial goals. With interest rates reaching up to 7.15% at select banks, this could be an opportune moment to lock in your investment at competitive rates. Whether you’re preparing for retirement, working towards a specific savings target, or aiming to diversify your investments, explore the latest FD schemes and select one that best suits your financial objectives.
Sources: msn.com
