2 Government Banks That Offer Interest Rates Of 8.05% On Fixed Deposits

Interest rates have risen sharply over the last few quarters, with the Reserve Bank of India finally deciding to pause repo rates hikes last week. Several private and government sector banks have raised interest rates. Here are 2 government bank that offer 8.05% interest rates on fixed deposits.

Punjab National Bank Fixed deposits

Punjab National Bank offers fixed deposit holders an interest rate of 8.05% to super senior citizens on the 666-days deposit. Senior citizens are entitled to interest rates of 7.75%, while domestic citizens receive an interest rate of 7.25%. While the 666-days deposit is attractive for super senior citizens it is not so for normal regular depositors, who can get higher interest rates even at the larger private banks.

Union Bank of India fixed deposits

Union Bank of India offers an interest rate of 8.05% on 3-year deposits. Senior citizens get interest rates of 7.80% on these deposits, while regular depositors receive an interest rate of 7.30%. We like these deposits because the interest rates are for a slightly longer tenure. However, the problem here is that the deposits rates are not very attractive for regular deposits. With inflation running at 6% and above, the real rate of interest on these deposits is not very great.

RBI may pause hike in interest rates

It is highly possible that the Reserve Bank of India would extend a long pause for hike in interest rates and than start reducing the same. We would therefore urge investors to look to invest in the long-term deposits. Recently, the RBI held interest rates steady and did not hikes rates as was largely expected.

Says Aalesh Avlani, Founder, Credit Wise Capital, "The RBI's decision to keep the repo rate unchanged is expected to provide a much-needed boost to the NBFC sector and gives clarity on the overall direction the RBI is heading towards. This allows financial planning and maintaining borrowing costs not just for financial institutions but also for retail customers who have seen their EMIs rise significantly. Therefore, the pause button on the repo rate hikes should support the existing growth momentum in the NBFC sector."

Please invest in deposits that are safe and are offering good interest rates over a long-term duration.