Canara Bank Raises FD Rates: Senior Citizens Gain Most from Special 555-Day Deposit
Overview
Canara Bank has revised its fixed deposit interest rates, offering senior citizens the highest callable rate of 7% on its 555-day deposit, effective January 5, 2026. This move, along with similar adjustments by Bank of Baroda and Bank of Maharashtra, aims to attract deposits on special tenures as overall rates decline due to RBI monetary easing.
Canara Bank has announced revised fixed deposit interest rates, with its most attractive offering for senior citizens now set at 7% for a 555-day tenure. These new rates became effective from January 5, 2026.
Special Tenures Shine
The 555-day fixed deposit will yield 6.50% for the general public and 7.00% for senior citizens, marking the highest callable rate. Similarly, the 444-day deposit offers 6.45% to the general public and 6.95% to seniors. Rates for most other callable tenures exceeding one year are capped at 6.25% for general customers and 6.75% for senior citizens.
RBI Policy Drives Deposit Rate Trends
This revision occurs amidst a broader trend of declining deposit rates across the banking sector. The Reserve Bank of India's consistent monetary easing, including a cumulative 125 basis points cut in the repo rate to 5.25% over the past year, has reduced banks' cost of funds. Consequently, lenders are gradually lowering deposit rates, particularly for longer-term commitments, with special, shorter tenures becoming more competitive.
Public Sector Banks Adjust Offerings
Following Canara Bank's move, other public sector banks have also updated their FD rates. Bank of Baroda revised its rates on January 5, offering up to 7.00% for senior citizens and 7.05% for super senior citizens, primarily on its 444-day Square Drive Deposit Scheme. Bank of Maharashtra adjusted rates on January 7, 2026, with its 400-day special FD offering 6.65% to the general public and 7.15% to senior citizens.
Strategic Shift for Savers
Financial institutions are increasingly leveraging special short- and mid-term deposit tenures to attract and retain customer funds. For investors, especially senior citizens seeking stable returns, deposits ranging from 400 to 555 days currently present a more compelling yield compared to longer-term commitments, where rates have largely flattened.
