Amid falling interest rates on fixed deposits, state-owned Canara Bank announced a hike in its rates offered on retail term deposits of 2 to 10 years. The new rates will be effective from 27 November 2020 and on deposits less than Rs 2 crore.
The hike is likely to give the bank an edge over other public-sector banks. In its press release announcing the revision in interest rates for 2-10 year deposits, it said that "This makes Canara Bank offering the highest interest rate in this bracket among all the other PSU."
The new Canara Bank FD interest rates with effect from 27 November 2020 on deposits less than Rs 2 crore:
|Tenure||General interest rates (%)||Senior citizen interest rates (%)|
|7 days to 45 days*||2.95||2.95|
|46 days to 90 days||3.9||3.9|
|91 days to 179 days||4||4|
|180 days to less than 1 Year||4.45||4.95|
|1 year only||5.25||5.75|
|Above 1 year to less than 2 years||5.2||5.7|
|2 years & above to less than 3 years||5.4||5.9|
|3 years & above to less than 5 years||5.5||6|
|5 years & above to 10 Years||5.5||6|
- For deposits below Rs 5 lakh, the minimum tenure is 15 days.
- Additional rate of 0.5% for senior citizens is only applicable deposits less than Rs 2 crore with tenure of 180 days and above.
- The FD rates are also applicable to recurring deposits.
Canara Bank made the announcement on revision in its interest rates a day before the RBI's bi-monthly monetary policy announcement. On Friday, the central bank announced that the monetary policy committee has kept the repo rates unchanged at 4%.
In the mega amalgamation of PSBs that was announced in 2019, Canara Bank absorbed Syndicate Bank, making it the 4th largest PSB by size, the first three being SBI, PNB and BoB. The merger became effective on 1 April 2020.
In comparison, the State Bank of India (SBI) offered FD interest rate of 4.9% for 1-year-deposit, 5.10% for 2 years, 5.3% for 3-5 years and 5.4% for 5-10 years.