For almost five years, fixed deposit customers enjoyed attractive rates on their deposits parked with banks and non-bank lenders. But now, especially since February this year, almost all banks and NBFCs have adjusted their fixed deposit rates, aligning with the RBI repo rate cut move. The RBI has cut rates by 100 bps cumulatively over the last three monetary policy reviews. The current repo rate now stands at 5.5% after the recent 50 bps cut by the central bank.

Banks, especially PSU ones, have not only cut rates on regular FD plans but also slashed interest on special fixed deposit schemes.

Immediately after the cut in the repo rate, the country’s major PSU banks have slashed rates on their special FD schemes. In this write-up, we will take a look at the current interest rates SBI, PNB, Indian Bank, Bank of Baroda and Canara Bank are offering on their special FD plans.

Also read: Senior citizens can still earn 9% on FDs — Know which banks offer highest interest rates

What’s changed in special FD schemes?

Indian Bank has reduced interest rates on its “INDSECURE” scheme to 6.90% for general customers, 7.40% for senior citizens, and 7.65% for super senior citizens. The rates were earlier in the range of 7.25%–7.90%.

Tenure: 444 days | Valid date: 9 June–30 September 2025

Canara Bank’s 444‑day special FD scheme now offers 6.60% returns to general customers and 7.10% returns to senior citizens — earlier the rates were 6.9%–7.4%.

Other banks including BOB, PNB, SBI have also cut rates on special schemes of 390 to 444 days by 10–25 basis points.

Can interest rates fall further?

Experts believe that if inflation (CPI) remains around 4%, then RBI can make another cut this year. In such a situation, there will be more pressure on the banks, and FD rates can go down further.

What are the options for investors other than FDs?

If you are not satisfied with the returns of FD, you can consider these options:

Debt Mutual Funds – Potential returns up to 7%–8%

RBI Floating Rate Bonds – 7.15% interest

Senior Citizen Saving Scheme (SCSS) – 8.2% interest (Government scheme)

Also read: Canara Bank cuts home, personal loan interest rates — check new lending rates

Summing up…

For those who want security and stability, FD is still a good option, but the return expectations will have to be low. Current trends suggest that interest rates may remain soft in the future as well.