Check which PSB offers the best FD rates: SBI vs Bank of Baroda vs other banks

With the Reserve Bank of India (RBI) raising repo rates many times in the last one year, banks have also raised their interest rates on their term deposits. Most of the public sector banks (PSBs) are offering interest rates of above 6.5 per cent for regular customers. The rate is even more lucrative for senior citizens.

The interest rate earned on fixed deposits in banks (excluding small finance banks) has reached 8 per cent, which was merely in the range of 5 to 6.5 per cent a year ago. Senior citizens are in for an even sweeter deal as they get an additional interest rate of 0.50 per cent on fixed deposits.

As a measure to cope with the growing inflation, the RBI has increased the repo rate by 250 basis points (bps) in the last one year. Banks have also started offering the benefits of the rate hike to their fixed deposit customers. However, the quantum of interest rate hikes on fixed deposits varies from bank to bank. Banks decide the interest rates of their deposits based on various factors such as liquidity, credit demand, assets, liabilities, cost of funds, etc.

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