After the Reserve Bank of India (RBI) cut the repo rate, many banks, especially public sector banks (PSU banks), are gradually changing the interest rates of fixed deposits (FDs) and savings accounts. This is directly affecting those investors who expect stable income by investing their savings in FDs. Now, Canara Bank has also cut its FD and savings account interest rates, which will come into effect soon.
Canara Bank changes interest rates on FDs and savings accounts: Know the new rates
Canara Bank has changed the interest rates of fixed deposits (FDs) and savings accounts. These new rates have come into effect from 21 May 2025 for FDs and 19 May 2025 for savings accounts. The cut in FD rates will be applicable on deposits of less than Rs 3 crore.
What are the new FD interest rates?
As per the new rates, general customers will now get interest ranging from 4% to 7% on callable FDs, while senior citizens will get interest ranging from 4% to 7.50%.
Earlier, on April 10, 2025, these rates were 4%–7.25% (for general customers) and 4%–7.75% (for senior citizens).
| 2. TERM DEPOSITS Rate of Interest (%) p.a. For Deposits less than Rs 3 Crore w.e.f. 21.05.2025 | ||||||||
| A. Domestic | ||||||||
| Less than Rs.3 Crore | ||||||||
| Callable | Non Callable ( Above Rs.1 Crore ) $ | |||||||
| Term Deposits (All Maturities) | General Public | Senior Citizen | General Public | Senior Citizen | ||||
| Rate of Interest (% p.a.) | Annualised Interest yield (% p.a.) ** | Rate of Interest (% p.a.) # | Annualised Interest yield (% p.a.) ** | Rate of Interest (% p.a.) | Annualised Interest yield (% p.a.) ** | Rate of Interest (% p.a.) # | Annualised Interest yield (% p.a.) ** | |
| 7 Days to 45 Days | 4 | 4.06% | 4 | 4.06% | NA | NA | NA | NA |
| 46 Days to 90 Days | 5.25 | 5.35% | 5.25 | 5.35% | 5.35 | 5.46% | 5.35 | 5.46% |
| 91 Days to 179 Days | 5.5 | 5.61% | 5.5 | 5.61% | 5.6 | 5.72% | 5.6 | 5.72% |
| 180 Days to 269 Days | 6.15 | 6.29% | 6.65 | 6.82% | 6.25 | 6.40% | 6.75 | 6.92% |
| 270 Days to less than 1 Year | 6.25 | 6.40% | 6.75 | 6.92% | 6.35 | 6.50% | 6.85 | 7.03% |
| 1 Year Only | 6.85 | 7.03% | 7.35 | 7.56% | 7 | 7.19% | 7.5 | 7.71% |
| 444 Days | 7 | 7.19 | 7.5 | 7.71 | 7.1 | 7.29 | 7.6 | 7.82 |
| Above 1 Year to less than 2 Years | 6.85 | 7.03% | 7.35 | 7.56% | 7 | 7.19% | 7.5 | 7.71% |
| 2 Years & above to less than 3 Years | 6.9 | 7.08 | 7.4 | 7.61 | 7 | 7.19 | 7.5 | 7.71 |
| 3 Years & above to less than 5 Years | 7 | 7.19 | 7.5 | 7.71 | NA | NA | NA | NA |
| 5 Years & above to 10 Years | 6.7 | 6.87% | 7.2 | 7.40% | NA | NA | NA | NA |
Source: Bank website
Special rates for senior and super senior citizens
Senior citizens (above 60 years) will get 0.50% additional interest on FDs (except NRE/NRO and CGA) of more than 180 days and less than Rs 3 crore.
Super senior citizens (80 years and above) get 0.60% additional interest under ‘Canara-444 Scheme’, making the total interest rate 7.60%.
Canara Bank Tax-Saver FD Scheme
Under the Tax Saving FD scheme, Canara Bank is offering 6.70% annual interest to general customers. The maximum investment limit in this scheme is Rs 1.5 lakh and it offers tax exemption under Section 80C of the Income Tax Act.
New Savings Account Interest Rates
From May 19, 2025, Canara Bank’s savings account interest rates will be between 2.70% to 4.00%, depending on your account balance.
| DOMESTIC/NRO/NRE SAVINGS BANK DEPOSITS – W.E.F. 19.05.2025 | ||
| S.No. | Slabs | ROI(%) |
| 1 | For outstanding Balance of less than Rs. 50 Lakh | 2.7 |
| 2 | For outstanding Balance of Rs. 50 Lakh to less than Rs 5 Cr | 2.75 |
| 3 | For outstanding Balance of Rs. 5 Cr to less than Rs 10 Cr | 2.8 |
| 4 | For outstanding Balance of Rs. 10 Cr to less than Rs 100 Cr | 3.05 |
| 5 | For outstanding Balance of Rs. 100 Cr to less than Rs 200 Cr | 3.5 |
| 6 | For outstanding Balance of Rs. 200 Cr to less than Rs 300 Cr | 3.1 |
| 7 | For outstanding Balance of Rs. 300 Cr to less than Rs 500 Cr | 3.1 |
| 8 | For outstanding Balance of Rs. 500 Cr to less than Rs 1000 Cr | 3.4 |
| 9 | For outstanding Balance of Rs. 1000 Cr & less than Rs. 2000 Cr | 3.55 |
| 10 | For outstanding Balance of Rs. 2000 Cr & above | 4 |
Source: Bank website
Is it right to invest in FDs now amid falling interest rates?
Bank FDs are generally considered a safe investment option, but when interest rates are gradually falling, the question arises whether it is still beneficial to lock money in FDs?
Interest rates have come down by as much as 0.25% in some deposit slabs, which has required investors who rely on FDs to rethink their strategy. This trend also indicates that the interest rate cycle is now at a new turning point — where investors who think carefully and plan wisely will now have to re-evaluate the balance between returns and safety.