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FD Interest Rate: While most of the banks in the country are reducing the interest on fixed deposits (FD), Bank of India has increased the interest rates on FD, giving relief to its customers. This decision of the bank is going to be of great benefit to those people who want guaranteed returns along with safe investment.

Bank of India has announced to increase interest rates on fixed deposits of less than Rs 3 crore. The new interest rates have come into effect from 18 May 2026. At a time when most banks are reducing returns on FD, this step of Bank of India is being considered as a relief news for investors.

The atmosphere had changed after the RBI cut

From February 2025, Reserve Bank of India i.e. RBI is continuously cutting the repo rate. So far a total reduction of 125 basis points has been made. Its effect is gradually becoming visible on the banking sector also.

Due to low repo rate, many government and private banks have reduced the interest on FD, especially in deposit schemes with tenure of 1 to 3 years. In such a situation, investors have started getting less returns than before.

Don’t invest just after seeing high interest.

Experts say that investing in FD only after seeing high interest rates is not a right decision. Before investing it is important to understand many important things. Investors should see for what period the increased interest rate is being given. Apart from this, it is also important to understand the difference between callable and non-callable FD. Information about how much penalty will be charged for premature withdrawal of money should also be obtained beforehand.

Along with this, it is also considered important to calculate the actual return after tax is deducted, because sometimes despite high interest rates, the profit after tax remains less.

Senior citizens can get more benefits

Bank of India is also giving additional benefits to senior citizens. Apart from this, the bank is also offering 15 basis points additional interest on non-callable FDs of more than Rs 1 crore for a period of at least one year. In such a situation, this opportunity can prove to be beneficial for investors who are planning safe investments for the long term.

Experts advise that before making an FD in any bank, one should definitely compare the interest rates, lock-in period, premature withdrawal rules and tax conditions of different banks. Investment made with correct information can give better and safe returns in future.

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