Canara Bank has revised its fixed deposit (FD) interest rates for deposits, with the highest returns now available on select short- and mid-term tenures.
Among callable fixed deposits, the bank is offering up to 7% interest to senior citizens, even as the overall interest rate environment has softened following policy easing by the Reserve Bank of India.
The revised rates came into effect from January 5, 2026.
Canara Bank FD rates: Best returns on special tenures
Under the revised structure, special tenure deposits continue to offer better returns than long-term FDs, especially for senior citizens.
555-day Fixed Deposits
General public: 6.50%
Senior citizens: 7.00% (highest callable rate)
444-day Fixed Deposits
General public: 6.45%
Senior citizens: 6.95%
For most other callable tenures beyond one year, Canara Bank’s FD rates remain capped at 6.25% for general customers and 6.75% for senior citizens, indicating that longer lock-ins no longer attract higher interest.
RBI rate cuts weigh on FD returns
The moderation in FD rates comes against the backdrop of sustained monetary easing by the Reserve Bank of India. Since last year, the RBI has cut the repo rate by a cumulative 125 basis points, bringing it down to 5.25% after the latest 25 bps reduction last month.
Lower policy rates typically reduce banks’ cost of funds, allowing lenders to gradually cut deposit rates, particularly on longer-term fixed deposits. As a result, FD returns across banks have steadily declined over the past year, with the sharpest cuts seen in multi-year tenures.
Other PSU banks also trim FD rates
Following Canara Bank’s move, several other public sector banks have also revised their FD interest rates this month.
Bank of Baroda
Bank of Baroda revised its FD rates on January 5.
General public: 3.50% to 6.45%
Senior citizens: up to 7.00%
Super senior citizens: up to 7.05%
The highest rate is offered under the 444-day Square Drive Deposit Scheme. For deposits above 400 days and up to 2 years (excluding 444 days), the bank offers 6.25% to regular customers and 6.75% to senior citizens.
Bank of Maharashtra
Bank of Maharashtra revised its FD rates on January 7, 2026.
General public: 2.60% to 6.65%
Senior citizens: additional 0.50%
The bank’s 400-day special FD offers the highest return:
General public: 6.65%
Senior citizens: 7.15%
What this means for FD investors
With interest rates on a downward trajectory, banks are increasingly using short- and mid-term special FD tenures to retain deposits. For investors—particularly senior citizens—400–555 day deposits currently offer better returns than locking money for five years or more, where rates have largely flattened.
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