Bank of India FD Rates Hiked: Earn Up to 7.60% Before Rates Fall Again

Key Takeaways

1. Bank of India has hiked FD interest rates on medium and long-term deposits below ₹3 crore, effective May 18, 2026. Rates now range from 6.5% to 6.7% per annum, depending on the tenure.
    
2. This move comes against the backdrop of the RBI cutting its repo rate to 5.25% in December 2025, a trend that had pushed most banks to reduce FD rates.

Bank of India Raises FD Rates: What Changed and Why It Matters?

Bank of India has increased interest rates on some fixed deposits below ₹3 crore. The new rates are effective from May 18, 2026, and apply mainly to medium and long-term FDs. 

This move is important because many banks had been reducing FD rates after the Reserve Bank of India cut the repo rate several times since February 2025, which brings it down to 5.25% by December 2025.

This could be a good chance to lock in better returns before rates fall again for depositors. Experts say banks have already reduced FD returns across many tenures, especially in the one to two-year category. Because of this, higher FD rates are becoming harder to find. 

What Do the New Rates Look Like? A Clear Breakdown for Depositors

Here are the revised FD interest rates by Bank of India, effective May 18, 2026:

Senior citizens get an extra 0.75% and super senior citizens get an extra 0.90% for deposits of 3 years and above.

Customers choosing non-callable FDs above ₹1 crore with a minimum tenure of one year will receive an extra 0.15% interest. But these deposits do not allow premature withdrawal or loans against the FD.

This increase is especially helpful for retirees and senior citizens looking for steady income. Once the FD is booked, the interest rate stays fixed for the full tenure even if market rates fall later.

Experts Suggest Booking FDs Soon

Financial experts believe this may be a limited-time opportunity. Adhil Shetty, CEO of BankBazaar, said that FD rates have already come down across many tenures and may fall further if the RBI continues cutting rates.

Experts are also recommending FD laddering. This means dividing your money into multiple FDs with different maturity periods instead of putting all the money into one FD. This method gives flexibility and allows investors to benefit if rates improve later.

Customers can open FDs through Bank of India branches, internet banking, or the bank’s mobile app.

Conclusion

Bank of India’s FD rate hike comes at a time when most banks are reducing returns on deposits. This may be a good time to lock in higher rates for the next few years for people looking for a safe and fixed income, especially senior citizens. The FD laddering method can also help balance safety and flexibility.

FAQs 

1. Will FD interest rates go up again after Bank of India’s latest hike?

Yes, FD rates can increase again in the future, but it depends on RBI policy and market conditions. Right now, most banks are lowering deposit rates because of repo rate cuts. Bank of India’s recent FD hike is one of the few positive changes for savers in 2026.

2. Which Indian banks are still offering higher FD rates in 2026?

A few banks are still giving better FD returns despite falling interest rates. Bank of India recently raised rates up to 6.70% for general customers, while senior citizens can get even higher returns depending on the tenure. Smaller banks and some private banks are also offering competitive FD rates for limited periods.