Public sector bank FD interest rates: Which bank offers the best returns? | Mint

Public sector bank fixed deposits (FDs) still remain a popular choice among investors who aspire to prioritise safety along with stability of returns. Given private sector banks and small finance banks may provide slightly higher rates, still for a long term basis many trust government backed banks for credible protection.

What are public sector bank fixed deposits?

The public sector bank FDs are government backed term deposits providing investors fixed returns for a set tenure. With safety from DICGC cover they are ideal for risk averse investors aspiring for secure growth in 2025.

Why choose public sector bank FDs in 2025?

Public sector bank fixed deposits provide safety, government backing and decent returns. They are ideal for conservative long term investors, who aspire to protect capital with stable interest income over fixed tenures.

Check out the snapshot of the current FD rates from leading public sector banks:

(Rates as updated on June 20, 2025). 

Are public sector bank FDs safe?

The Public sector bank FDs are considered very safe for investors. As these banking institutions are majority government owned. Furthermore, deposits are insured by DICGC up to ₹5 lakh providing extra protection against economic recessions for safety oriented investors.

This depends a lot on the kind of investors you are. The public sector bank FDs provide investors with higher safety and government backing. Whereas private bank FDs often provide better interest rates. The most appropriate choice in this case depends on your risk taking appetite, long term financial goals and return expectations.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation. Interest rates are subject to periodic revision by banks. Investors are advised to assess their risk appetite, refer to the official websites of banks, conduct due diligence on the institution, and consult a financial advisor before making any investment decisions.