In 2025, it’s time to make a smart decision about earning the best fixed deposit interest rates for your hard-earned money. When looking to park your savings in a fixed deposit (FD), finding the most competitive rates becomes crucial. Interestingly, despite the rise of private sector banks, most investors still trust government banks for the most secure and attractive fixed deposit returns.
Why Choose Government Bank Fixed Deposits?
The government backing provides an unparalleled sense of security, assuring investors that their money is safe. That is the reason people put their faith in the government-backed Post Office Monthly Income Scheme for a secure regular monthly income. An important aspect to note is that bank FD interest rates typically vary based on the duration of the deposit. Generally, longer-term deposits offer higher interest rates, making them an attractive option for long-term investors.
Comparative Fixed Deposit Interest Rates for Top 7 Government Banks in 2025
To help you make an informed decision, we’ve compiled a comprehensive comparison of fixed deposit interest rates across seven leading government banks:
State Bank of India (SBI)
SBI is India’s largest public sector bank, with a rich history dating back to 1955, offering comprehensive banking services across the country.
| Tenure | Fixed Deposit Interest Rates |
| 1 Year | 6.80% p.a. |
| 3 Years | 7.00% p.a. |
| 5 Years | 6.50% p.a. |
| 5 Years (Senior Citizens) | 7.50% p.a. |
Punjab National Bank (PNB)
PNB is a major government-owned bank known for its extensive branch network and commitment to supporting small and medium enterprises.
| Tenure | FD Rate of Interest |
| 1 Year | 6.80% p.a. |
| 3 Years | 7.00% p.a. |
| 5 Years | 6.50% p.a. |
| 5 Years (Senior Citizens) | 7.30% p.a. |
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Union Bank of India
Union Bank of India is a progressive public sector bank that focuses on digital banking innovations and provides a wide range of financial products.
| Tenure | Fixed Deposit Interest Rates |
| 1 Year | 6.80% p.a. |
| 3 Years | 6.70% p.a. |
| 5 Years | 6.50% p.a. |
| 5 Years (Senior Citizens) | 7.00% p.a. |
Central Bank of India
Central Bank of India is one of the oldest public sector banks, established in 1911, with a strong presence in urban and rural banking sectors.
| Tenure | FD Rate of Interest |
| 1 Year | 6.85% p.a. |
| 3 Years | 7.25% p.a. |
| 5 Years | 7.00% p.a. |
| 5 Years (Senior Citizens) | 7.25-7.45% p.a. |
Bank of Baroda
BOB is a multinational banking and financial services provider with a significant international presence and a reputation for customer-centric services.
| Tenure | Fixed Deposit Interest Rates |
| 1 Year | 6.85% p.a. |
| 3 Years | 7.25% p.a. |
| 5 Years | 7 % p.a. |
| 5 Years (Senior Citizens) | 7.25-7.45% p.a. |
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UCO Bank
It is a government-owned bank with a strong focus on agricultural and rural banking, supporting India’s agrarian economy.
| Tenure | Fixed Deposit Rates |
| 1 Year | 6.50% p.a. |
| 3 Years | 6.30% p.a. |
| 5 Years | 6.20% p.a. |
| 5 Years (Senior Citizens) | 7.07% p.a. |
IDBI Bank
Originally an industrial development bank, IDBI is now a full-service commercial bank providing diverse financial solutions to corporate and retail customers.
| Tenure | Fixed Deposit Rates |
| 1 Year | 6.80% p.a. |
| 3 Years | 6.50% p.a. |
| 5 Years | 6.50% p.a. |
| 5 Years (Senior Citizens) | 6.75% p.a. |
Key Observations about Fixed Deposit Interest Rates in 2025
- Senior citizens consistently receive higher interest rates across all banks
- 3-year terms generally offer the most competitive rates
- Rates range from 6.20% to 7.25% depending on the bank and tenure
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Tips for Choosing the Best Banks for Fixed Deposit Interest Rates
- Consider Your Investment Horizon: Choose a tenure that aligns with your financial goals
- Check Senior Citizen Rates: If applicable, leverage the additional interest benefits
- Compare Across Banks: Don’t settle for the first offer
- Understand Tax Implications: Fixed deposits are subject to tax deductions
Conclusion
Selecting the right fixed deposit interest rates can significantly impact your investment returns. While these rates are current as of 2025, always verify the latest rates directly with the banks before making a final decision.
Disclaimer: Interest rates are subject to change. Please check with individual banks for the most up-to-date and accurate information.
