Have you been counting on your fixed deposit to grow your savings? You’re not alone. For so many of us, FDs feel like a safe place a little financial cushion to fall back on when life gets tough. But just when you think things are stable, boom… something shifts.
If you’ve got an FD with Canara Bank, or you were planning to open one soon, there’s some important news you should know.
Canara Bank Just Slashed FD Interest Rates (Again)
Right before the big Reserve Bank of India (RBI) monetary policy meeting in June, Canara Bank quietly reduced the interest on fixed deposits. Yup, again.
That means you’ll earn a bit less than before on certain deposit durations—especially if you’re investing under ₹3 crore.
Let’s break it down so you know exactly how this affects your savings.
New Fixed Deposit Rates as of June 1, 2025
The new FD interest rates from Canara Bank came into effect on June 1st, and they’ve dropped between 10 to 25 basis points for many tenures.
Here’s what the updated rates look like for general citizens and senior citizens:
| FD Tenure | General Rate | Senior Citizen Rate |
|---|---|---|
| 7 to 45 days | 4.00% | 4.50% |
| 46 to 90 days | 5.25% | 5.75% |
| 91 to 179 days | 5.50% | 6.00% |
| 180 to 269 days | 6.15% | 6.65% |
| 270 days to less than 1 year | 6.25% | 6.75% |
| 1 year | 6.75% | 7.25% |
| 444 days (highest return) | 7.00% | 7.50% |
| Above 1 to less than 2 years | 6.85% | 7.35% |
| Above 2 to less than 3 years | 6.90% | 7.40% |
| Above 3 to 5 years | 6.75% (was 7%) | 7.25% |
| Above 5 to 10 years | 6.70% | 7.20% |
What’s Causing the Drop in FD Interest Rates?
You might be wondering—why now? Why would Canara Bank lower interest when everything’s getting more expensive?
Here’s what’s going on:
- The RBI is meeting from June 4 to June 6, and there’s buzz that they might cut the repo rate.
- When that happens, banks lower FD and loan interest rates to keep up.
- Canara Bank seems to be adjusting early—maybe to prepare for another central rate shift.
If you’re depending on your FD interest to cover living expenses or long-term goals, these changes might feel like a blow.