SBI vs other public sector banks: Which PSU bank offers the highest FD interest rates in July 2026?

Fixed deposits (FDs) remain one of the most preferred investment options for risk-averse investors seeking assured returns. While the Reserve Bank of India (RBI) has maintained interest rates in recent months, banks continue to offer varying FD rates across tenures, making it important for investors to compare returns before locking in their money.

Among public sector banks (PSBs), Bank of Baroda currently offers the highest FD interest rate of 6.75% for general citizens, while Bank of India and Punjab & Sind Bank follow closely with rates of up to 6.85% on select tenures. Senior citizens continue to enjoy an additional interest rate benefit, with some public sector banks offering returns of up to 8.30% under special schemes.

How SBI's FD rates compare

India's largest lender, State Bank of India (SBI), offers FD interest rates ranging from 3.05% to 6.45% for retail domestic deposits below Rs 3 crore, depending on the tenure.

For general customers, SBI offers:

• 7 days to 45 days: 3.05%
• 46 days to 179 days: 4.90%
• 180 days to 210 days: 5.65%
• 211 days to less than one year: 5.90%
• 1 year to less than 2 years: 6.25%
• 2 years to less than 3 years: 6.40%
• 3 years to less than 5 years: 6.30%
• 5 years to 10 years: 6.05%

Senior citizens receive an additional 50 basis points across most tenures. Under the SBI We-care scheme, senior citizens earn 7.05% on deposits with maturities between five and ten years.

SBI also offers an additional 10 basis points to super senior citizens (80 years and above) under the SBI Patrons scheme.

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Top FD rates offered by public sector banks

Based on rates available as of July 8, 2026, here is how major PSU banks compare:

Bank	Highest FD Rate (%)
Bank of India	6.85%
Punjab & Sind Bank	6.85%
Indian Bank	6.80%
Bank of Baroda	6.75%
Union Bank of India	6.65%
Bank of Maharashtra	6.65%
Canara Bank	6.60%
Punjab National Bank	6.60%
Indian Overseas Bank	6.60%
State Bank of India	6.45%
UCO Bank	6.45%

For one-year deposits, Bank of India and Indian Overseas Bank offer 6.50%, among the highest in the category. For three-year tenures, Bank of India leads with 6.70%, while Bank of Baroda offers 6.30% on five-year deposits.

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NBFCs and small finance banks continue to lead

While public sector banks provide competitive returns backed by sovereign ownership, higher rates are available elsewhere.

According to the latest comparison, NBFCs and financial institutions currently offer FD rates ranging from 7.50% to 9.10% for general investors and up to 9.35% for senior citizens.

Similarly, several small finance banks (SFBs) continue to offer FD rates above 8%, making them attractive for investors willing to take slightly higher institutional risk in exchange for better returns.

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What should investors consider?

Experts advise investors not to choose an FD solely based on the highest interest rate. Factors such as the bank's financial strength, deposit insurance coverage, liquidity needs and investment tenure should also be considered.

Senior citizens, in particular, can benefit from the additional interest offered by most banks, while investors with large deposits may also explore SBI's non-callable term deposits, which offer up to 6.80% for general customers and 7.30% for senior citizens on select maturities.

With FD rates differing significantly across banks and tenures, comparing returns before investing can help maximise fixed-income earnings without compromising safety.