Interest rates in the economy are expected to fall, as inflation cools off. Here are a few government owned nationalised banks that offer the highest interest rates on fixed deposits. Some of the deposit rates offered by these banks is even higher then private sector banks. Remember, it's best to lock your fixed deposits for a longer duration to hedge against falling interest rates.
Punjab and Sind Bank
The government owned Punjab and Sind Bank is offering an interest rate of 9.25 per cent on 500 days deposit (roughly about 16 months). Deposits of the bank for other tenures comes with a lower interest rate. Punjab and Sind Bank has a strong presence in North India.
State Bank of Mysore
A 2-3 year fixed deposit at State Bank of Mysore will fetch you an interest rate of 9.1 per cent. The Bank's 3-5 year deposit also fetches a similar interest rate. This is the second highest among public sector banks. State Bank of Mysore is a subsidiary of State Bank of India with a good network of branches, which are predominantly in the South, particularly Karnataka.
Andhra Bank is offering an interest rate of 9 per cent across various tenures of the bank. In fact, the 9 per cent offered is for deposits above 1 year and there are no restrictions on the tenure
State Bank of Hyderabad
Like State Bank of Mysore, State Bank of Hyderabad is also a subsidiary of State Bank of India. The bank is offering an interest rate of 9 per cent on its 1-2 year deposit. There are various other nationalised banks that are offering similar interest rates of 9 per cent.