Bank of India Raises Fixed Deposit Interest Rates on Select Tenures

State-owned lender offers up to 6.7% on medium and long-term deposits as banks compete aggressively for retail savings

The revised rates have come into effect from May 18 and are applicable to domestic fixed deposits across various maturity periods.

The move comes at a time when banks are aggressively mobilising deposits to support strong credit growth and maintain liquidity amid rising competition in the financial sector.

Higher Interest Rates Across Key Deposit Tenures

Under the revised structure, Bank of India has increased interest rates on fixed deposits with maturity between one year and less than two years to 6.5 per cent per annum.

Deposits with tenure between two years and less than three years will now earn 6.6 per cent interest, while three-year fixed deposits will offer the highest revised return of 6.7 per cent annually.

The bank’s revised rates are aimed at attracting long-term retail deposits while strengthening its deposit base amid rising demand for loans across sectors.

Financial experts believe fixed deposits continue to remain one of the preferred investment options for conservative investors seeking stable and predictable returns.

Senior Citizens Continue to Receive Additional Benefits

Bank of India has retained additional interest rate benefits for senior and super senior citizens under the revised scheme.

Senior citizens will continue to receive an additional 50 basis points (bps) on deposits with maturity between six months and less than three years.

Meanwhile, super senior citizens will receive an extra 65 basis points for the same tenure category.

For deposits with maturity of three years and above, senior citizens will earn an additional 75 bps over the applicable interest rate, while super senior citizens will receive an additional 90 bps.

The enhanced rates are expected to make fixed deposits more attractive for retirees and elderly investors seeking regular income and capital safety.

Additional Benefits on Non-Callable Deposits

The bank has also announced higher returns for non-callable fixed deposits above ₹1 crore.

According to the revised guidelines, such deposits with a minimum tenure of one year will receive an additional 15 basis points over the applicable interest rate.

However, the bank clarified that facilities such as premature withdrawal and loans against deposits will only be available for callable deposit schemes.

Non-callable deposits are generally preferred by institutional and high-value investors willing to lock funds for higher returns.

Deposit Competition Intensifies in Banking Sector

The latest rate revision reflects the growing competition among banks to attract retail deposits as credit growth in the economy remains strong.

Indian banks have been witnessing sustained demand for loans across retail, housing, MSME and infrastructure sectors, increasing the need for stable funding sources.

Several public and private sector banks have revised fixed deposit rates over recent months as institutions seek to improve deposit mobilisation amid changing liquidity conditions.

Analysts believe banks are likely to continue offering attractive deposit rates in the near term to maintain healthy balance sheet growth.

Fixed Deposits Remain Popular Amid Market Volatility

Despite increasing interest in market-linked investments such as mutual funds and equities, fixed deposits continue to remain highly popular among Indian savers.

Investors often prefer FDs during periods of market volatility and economic uncertainty because they provide guaranteed returns and lower risk compared to equity-based investments.

The current high-interest-rate environment has further improved the attractiveness of fixed deposits, particularly for conservative investors and senior citizens.

Financial planners say laddering deposits across multiple tenures can help investors optimise returns while maintaining liquidity flexibility.

Digital Banking Channels Support Easy Access

Bank of India said customers can open fixed deposits conveniently through multiple channels including branches, internet banking and the bank’s mobile application.

The increasing use of digital banking platforms has significantly improved customer accessibility and simplified the process of opening and managing fixed deposits.

Banks are increasingly focusing on digital savings products and online deposit offerings as customer preferences continue shifting toward technology-driven banking services.

Outlook for Depositors

With interest rates remaining elevated and banks continuing to compete for deposits, retail investors are likely to benefit from better returns on fixed income products over the coming months.

However, analysts also expect deposit rates to remain sensitive to future monetary policy decisions by the Reserve Bank of India and evolving liquidity conditions in the banking system.

For now, higher fixed deposit rates are providing savers with an opportunity to lock in attractive returns amid uncertain market conditions and rising global economic volatility.