FD rates April 2026: SBI vs Bank of Baroda vs PNB — Which public sector bank offers better returns?

Fixed deposits (FDs) are increasingly being viewed as a tactical allocation tool rather than just a safety net, especially in a stabilising interest rate environment. With the Reserve Bank of India (RBI) holding the repo rate steady at 5.25% for the second consecutive meeting, FD rates across banks appear to have plateaued — making this a crucial window for investors to lock in yields.

Among public sector banks (PSBs), State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) remain the top choices for conservative investors. While all three offer relatively similar returns in the 6%–6.6% range, a closer comparison reveals meaningful differences across tenures.

SBI vs BoB vs PNB

Short-term deposits (1 year): SBI offers around 6.25% for 1-year deposits, slightly ahead of PNB at 6.25% and Bank of Baroda at 6.10%. For short-duration investors, SBI and PNB are marginally more attractive.

Medium-term deposits (2–3 years): This is where competition intensifies.

PNB offers around 6.30% for both 2 and 3 years
BoB provides 6.25% for 2–3 years
SBI remains slightly lower at around 6.25%–6.30%

The differences are narrow, but PNB edges ahead in the 2–3 year segment.

Special tenure schemes:

Bank of Baroda’s 444-day “Square Drive Deposit Scheme” stands out with rates up to 6.45%, making it one of the highest among PSU banks.

Similarly, SBI’s “Amrit Vrishti” (444 days) offers around 6.45%, slightly revised from earlier levels.

These special schemes are currently the sweet spot for investors looking to maximise returns within PSU banks.

Long-term deposits (5 years):

All three banks converge in this segment:

SBI: ~6.00%
PNB: ~6.10%
BoB: ~6.30%

Bank of Baroda offers a slight premium for long-term investors, although the overall return remains moderate.

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Senior citizen advantage

All three banks provide an additional 50–75 basis points for senior citizens.

SBI and PNB offer rates up to ~7%+ for select tenures
BoB also reaches around 7%+, especially in special schemes

This makes PSU bank FDs particularly attractive for retirees seeking stable income.

Safety vs returns

Despite small finance banks offering rates above 8%, PSU banks continue to attract a large share of deposits. The reason is simple: trust and perceived sovereign backing.

For risk-averse investors, especially retirees and those parking large sums, SBI, BoB, and PNB offer:

High credibility
Strong balance sheets
Lower perceived default risk

However, this safety comes at the cost of slightly lower returns.

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Strategic takeaway: Where should you invest?

Best short-term (1 year): SBI / PNB (marginal edge)
Best medium-term (2–3 years): PNB
Best special tenure: SBI & BoB (444-day schemes)
Best long-term (5 years): Bank of Baroda

In the current rate cycle, investors should focus less on marginal rate differences and more on tenure strategy and liquidity needs. Laddering FDs across 1–3 years, while allocating a portion to special schemes like 444 days, can help optimise returns.

Other FD rates

Small Finance Banks

Small finance banks continue to dominate the high-yield segment. Suryoday Small Finance Bank is offering up to 8.1%, while ESAF and Jana Small Finance Banks are in the 7.5%–8% range across key tenures.

These rates are significantly higher than the broader market, but they come with trade-offs. Investors need to consider deposit insurance limits (₹5 lakh per bank) and the relatively lower balance sheet strength compared to larger institutions.

For yield-seeking investors, a diversified allocation across multiple banks—rather than concentrating funds in one—can help balance risk.

Private Banks

Private sector banks are positioning themselves as a middle ground. IDFC First Bank offers up to 7.4%, while DCB, RBL, and Bandhan Bank are in the 7%+ range for select tenures.

Meanwhile, large private lenders such as HDFC Bank, ICICI Bank, and Axis Bank offer lower but more stable returns in the 6.3%–6.5% band. These banks appeal to investors who prioritise credibility, liquidity, and convenience over marginal yield gains.