PNB and Bandhan Bank Slash FD Interest Rates Again: Check the Latest Rates Effective from May 1

In a move that impacts millions of fixed deposit (FD) investors across the country, Punjab National Bank (PNB) and Bandhan Bank have revised their FD interest rates, with notable reductions in short- and medium-term deposits. This is PNB’s second rate cut within just two months, signaling a shift in the banking sector's deposit strategy amid changing market dynamics.

Let’s take a detailed look at the new rates and what they mean for depositors—especially senior citizens.

🔻 PNB Cuts FD Rates for the Second Time in Two Months

Punjab National Bank has announced a reduction in fixed deposit interest rates, effective May 1, 2025. The bank has trimmed interest rates by up to 25 basis points (bps) on select tenures, particularly short- and medium-term FDs. This comes after a similar rate revision in April 2025, suggesting a cautious approach by the public sector lender amidst evolving liquidity conditions.

According to the bank's updated FD rate chart, general customers will now earn between 3.50% to 7.10% on FDs ranging from 7 days to 10 years. The highest rate of 7.10% is being offered for a 390-day FD.

📉 New PNB FD Rates for Retail Deposits (< ₹3 crore)

Here are the updated interest rates for key tenures:

Tenure Old Rate New Rate

180 to 270 days	6.25%	6.00%
271 to 299 days	6.50%	6.25%
303 days	6.40%	6.15%
304 days to less than 1 yr	6.50%	6.25%
1 year	6.80%	6.70%

While the changes may seem marginal, they can significantly impact returns on bulk FDs or corporate deposits. For retail investors, it's a cue to reassess their short-term investment strategy.

👴 Senior Citizens to Benefit from Additional Interest

PNB continues to offer additional interest benefits to senior citizens, making FDs a relatively safer and more rewarding option for those aged 60 and above. Here’s how the bonus structure works:

• Up to 5-year FD: Additional 50 basis points

• More than 5-year FD: Additional 80 basis points

As a result, senior citizens can now earn between 4.00% and 7.60%, depending on the tenure they choose.

💼 Bandhan Bank Revises FD Rates, Offers Up to 8.25%

Private lender Bandhan Bank has also announced a revision in its fixed deposit rates, with the changes effective from May 1, 2025. The bank is offering competitive rates to both general and senior citizen depositors:

• General Public: Interest rates range from 3.00% to 7.75%

• Senior Citizens: Can earn between 3.75% and 8.25%

For a 1-year FD, Bandhan Bank is offering:

• 7.75% for regular customers

• 8.25% for senior citizens

These rates place Bandhan Bank among the top contenders offering high FD returns in the current scenario.

💡 What This Means for FD Investors

The back-to-back reduction in FD rates by a major public sector bank like PNB is a signal for conservative investors to rethink their deposit plans, especially if they rely on short- or mid-term instruments for regular income. With banks increasingly adjusting rates based on liquidity and inflationary trends, now might be the right time to lock in higher rates where still available—especially with smaller or private banks like Bandhan Bank offering more attractive returns.

For senior citizens, these rate changes may not pose as much of a challenge thanks to preferential interest rates, but it’s always wise to compare offerings across banks before making a decision.

📌 Key Takeaways

• PNB has slashed FD rates by up to 25 bps for select short- and medium-term deposits.

• The highest rate offered by PNB is now 7.10% for a 390-day deposit.

• Senior citizens can earn up to 7.60% from PNB FDs.

• Bandhan Bank is offering up to 8.25% interest for senior citizens and 7.75% for the general public on 1-year FDs.

• New rates for both banks are effective from May 1, 2025.