More than seven crore Indians rely on fixed deposits (FDs) as their “sleep-well” investment – the place they park emergency cash, retirement money or that bonus they can’t risk in equities.

But even the humble FD is having its moment: five government-owned banks have quietly nudged rates as high as 7.15 % this month. Ready to see who’s handing out the extra gravy – and how to grab it before the quarter ends?

Which PSU banks are paying 7.15 % – and how much have they raised?

Below we compare the banks’ latest promotional/highest slabs (announced 22 June 2025) with their standard 1-year callable rates available earlier in the year. In every case the headline return is now at least 30 basis points higher.

PSU Bank	Earlier 1-Yr FD (Jan-Jun ’25)	New Highest Special Tenure	Jump (bps)
Bank of Maharashtra	6.75 % – 365 days	7.15 % – 366 days	+40
Indian Overseas Bank	6.70 % – 1 yr	7.10 % – 444 days	+40
Punjab & Sind Bank	6.10 % – 1 yr	7.05 % – 444 days	+95
Bank of India	6.50 % – 1 yr	7.00 % – 999-day “Green FD”	+50
Central Bank of India	6.70 % – 1 yr	7.00 % – 2–3 yrs / 1111-day	+30

How to squeeze the best returns from a ₹6 lakh corpus – meet Priya’s FD ladder

Imagine Priya, a 32-year-old freelancer, who wants safety and liquidity. Instead of locking the full ₹6 lakh in one chunky FD, she builds a three-step ladder:

Read More – How to Calculate Fixed Deposit Interest – Step-by-Step Guide

FD No.	Amount	Initial Tenure	Likely Rate (today)	On Maturity…
1	₹2 lakh	1 year	6.3 %	Renew for 3 yrs
2	₹2 lakh	2 years	6.5 %	Renew for 3 yrs
3	₹2 lakh	3 years	7.0 %	Renew for 3 yrs

Liquidity every year: one tranche falls due annually, covering big-ticket needs without breaking the others.

Rate-hunting built-in: each renewal chases whatever three-year promo is hottest at that point (historically the sweet spot for PSU banks).

Compounding edge: staggering maturities keep money working at peak rates instead of sitting in savings after one bulk FD matures.

Why should you lock FDs before 30 June 2025?

The RBI chopped the repo rate by a hefty 50 bps to 5.50 % on 6 June 2025 – its steepest single cut in five years. Banks typically re-price deposits within weeks, but most wait until quarter-end bookkeeping is done. That’s why the window until Q2 closes on 30 June is gold: today’s promo rates could be gone (or trimmed) in July.

Major banks are already trimming FD yields:

Bank	Max Cut	Remarks
Canara Bank	25 bps	Multiple short tenures
Union Bank of India	35 bps	Sharpest drop in 1–2 year slabs
Indian Overseas Bank	30 bps	New rates from 10 Jun ’25
HDFC Bank	20–25 bps	Depends on the amount/tenure
Axis Bank	25 bps	1 yr + buckets affected
ICICI Bank	30 bps	Across retail FDs
Indian Bank	50 bps	Effective 9 Jun ’25

After the repo-rate pivot, Indian Bank hammered some tenures by a full half per cent – a ₹1 crore nest egg now earns ₹25,000 less each year. Expect more lenders to follow.

Conclusion

Promo FD windows don’t stay open long – especially when the policy needle is pointing south. If you’ve been waiting for a “good” PSU-bank rate, June 2025 is that moment. Build a ladder, lock in the 7-per centres before quarter-close, and let compounding (not worry) do the heavy lifting for your savings.

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