3 Government Banks With The Highest Interest Rates On Bank Fixed Deposits

With inflation rising steadily over the last few years, the Reserve Bank of India too has hiked interest rates. Here are a few government banks that offer the highest interest rates on fixed deposits.

Punjab and Sind Bank Fixed deposits

This bank is by far the leader when it comes to offering the highest interest rates on bank deposits. The PSB-Utkarsh 222 Days Fixed Deposit Scheme offers an interest rate of 8.85% for super senior citizens, 8.50% for senior citizens and 8% for the normal category. This is only for the online mechanism. If you opt for visiting the branch the interest rates get reduced and individuals get 8.60%, 8.25% and 7.75% for super senior citizens, senior citizens and regular deposit holders. This is the highest interest rates that individuals can get from a government bank in India.

Central Bank of India fixed deposits

Central Bank of India too offers pretty decent interest rates for investors. On a 444-month deposit the bank offers an interest rate of 8.10% for senior citizens, while regular deposit holders get an interest rate of 7.60% on the non callable deposits. The callable deposits at the bank offer a slightly lower interest rates. These interest rates are the second best from a government bank in India. The only problem is that the tenure is too short. So, after the completion of 444 days, if interest rates have dropped, investors would get lower interest rates going forward.

666-days Fixed deposit at Punjab National Bank

These deposits from PNB offer an interest rate of 8.05% for super senior citizens, 7.75% for senior citizens and 7.25% for regular deposits. These are for fixed deposits booked for amounts that are less than Rs 2 crores. The fixed deposits are safe. However, the 666-days deposit implies that the tenure is rather short, which means on maturity, if interest rates have fallen than the chances of getting lower interest rates on renewal is a possibility. This is why we have been constantly advocating to go for the longer-term tenure of the fixed deposits. Overall, we believe that the present era is good as interest rates have risen. There is a probability that interest rates may rise a little bit ore, before dropping once again.