Fixed deposits (FDs), also known as term deposits or time deposits, continue to be among the most preferred investment options for conservative investors seeking stable returns and capital protection. By locking in funds for a fixed tenure, depositors earn a predetermined rate of interest either at regular intervals or on maturity. The certainty of returns and low risk make FDs suitable for meeting short-term financial goals, building an emergency corpus and generating post-retirement income.
Among public sector lenders, the State Bank of India (SBI) and Punjab National Bank (PNB) are two of the largest players. While both banks offer competitive interest rates across various tenures, a comparison of their latest FD rates shows that each has strengths depending on the investment period and depositor category.
SBI vs PNB FD rates
For domestic fixed deposits below ₹3 crore, SBI offers interest rates ranging from 3.05% to 6.80% per annum for the general public and 3.55% to 7.30% for senior citizens. The bank also provides an additional 50 basis points to senior citizens under its SBI Wecare deposit scheme.
PNB offers interest rates ranging from 3.00% to 6.40% for general customers and 3.50% to 6.90% for senior citizens. It also offers higher rates to super senior citizens, with returns going up to 7.20% on select tenures.
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Which bank offers higher returns?
For the popular one-year tenure, SBI offers 6.25% to general customers, while PNB offers 6.10% on exactly one year. However, PNB offers 6.30% for deposits between one year and 389 days and 6.40% for its special 390-day deposit, giving it an edge for investors willing to opt for a slightly longer tenure.
For deposits maturing in two to three years, SBI offers 6.40%, marginally higher than PNB’s 6.30%.
For three years to less than five years, SBI again leads with 6.30%, while PNB offers 6.10% for deposits up to 1,203 days and 6.10% for deposits between 1,205 days and five years.
On five-year deposits, including tax-saving FDs, SBI offers 6.05%, slightly higher than PNB’s 6.00% for general customers.
Both banks provide an additional 50 basis points to senior citizens on deposits below ₹3 crore. However, PNB also offers higher rates to super senior citizens, making it a better choice for eligible customers in certain maturity buckets.
| Tenure | SBI – General Public (% p.a.) | PNB – General Public (% p.a.) | Who Offers More? |
| 7-45 days | 3.05 | 3.00 | SBI |
| 46-179 days | 4.90 | 4.50-4.90 | SBI/Similar |
| 180 days to | 5.65-5.90 | 5.55-5.60 | SBI |
| 1 year | 6.25 | 6.10 | SBI |
| 1 year to 389 days | 6.25 | 6.30 | PNB |
| 390 days (Special FD) | 6.25 | 6.40 | PNB |
| 2 years to | 6.40 | 6.30 | SBI |
| 3 years to | 6.30 | 6.10 | SBI |
| 5 years to 10 years | 6.05 | 6.00 | SBI |
| Highest FD Rate | 6.80% | 6.40% | SBI |
| Senior Citizen Highest Rate | 7.30% | 7.20% | SBI |
Source: SBI and Punjab National Bank websites. Rates effective July 3, 2026.
How other public sector banks compare
Although SBI and PNB dominate the public sector banking space, they do not currently offer the highest FD rates among government-owned lenders.
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According to rates effective July 1, 2026, Bank of India and Punjab & Sind Bank offer the highest peak interest rate of 6.85%, followed by Indian Bank at 6.80%, Bank of Baroda at 6.75%, and Union Bank of India and Bank of Maharashtra at 6.65%. Canara Bank and Indian Overseas Bank offer peak rates of 6.60%, while UCO Bank and SBI offer 6.45%.
| Bank | Highest FD Rate (% p.a.) | 1-Year FD | 3-Year FD | 5-Year FD |
| Bank of India | 6.85% | 6.50% | 6.70% | 6.00% |
| Punjab & Sind Bank | 6.85% | 5.85% | 5.85% | 5.95% |
| Indian Bank | 6.80% | 6.10% | 6.05% | 6.00% |
| Bank of Baroda | 6.75% | 6.25% | 6.25% | 6.30% |
| Union Bank of India | 6.65% | 6.20% | 6.10% | 6.00% |
| Bank of Maharashtra | 6.65% | 6.20% | 5.25% | 5.00% |
| Punjab National Bank | 6.60% | 6.25% | 6.35% | 6.10% |
| Canara Bank | 6.60% | 6.25% | 6.25% | 6.25% |
| Indian Overseas Bank | 6.60% | 6.50% | 6.10% | 6.10% |
| State Bank of India | 6.45% | 6.25% | 6.30% | 6.05% |
| UCO Bank | 6.45% | 6.10% | 6.00% | 6.00% |
Source: Respective public sector banks. Rates effective July 1, 2026.
Other features to consider
Apart from interest rates, investors should also compare factors such as liquidity, premature withdrawal rules, interest payout options and additional banking facilities before choosing an FD.
SBI offers a wide range of specialised deposit products, including FCNR(B), NRE, NRO and RFC fixed deposits for non-resident Indians. It also provides non-callable term deposits between ₹1.01 crore and ₹3 crore, which offer interest rates up to 6.80% for general customers and 7.30% for senior citizens, although premature withdrawals are not permitted.
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PNB, meanwhile, offers nomination facilities, flexible interest payout options and loans against fixed deposits, making its products attractive for customers seeking liquidity without breaking their deposits.
For investors focused solely on returns, PNB offers better rates on certain special tenures and additional benefits for super senior citizens. However, SBI remains competitive across key maturity buckets and continues to be a preferred choice because of its extensive branch network, diverse FD offerings and strong nationwide presence.
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