PNB NEWS: After the Reserve Bank of India (RBI) cut the repo rate for the second time this year, Punjab National Bank (PNB) has lowered fixed deposit (FD) interest rates, disappointing many depositors. This decision affects millions of customers who look to FDs as a source of stable returns.
FD Rate Decreases Follow RBI Repo Rate Cut
Earlier in the year, in February, the RBI had reduced the repo rate by 25 basis points and then again in April. As anticipated, several banks, including PNB, adjusted their lending and deposit rates accordingly. Lower loan rates may be advantageous for borrowers, but FD investors are now faced with lower returns on their hard-earned savings.
Latest PNB FD Interest Rates (Below ₹3 Crore)
PNB has revised its FD interest rates across various tenures, offering returns between 3.50% and 7.10% for the general public. Here’s a breakdown of the key changes:
- 7 to 10-year FDs: Interest rate slashed from 6.50% to 6.00%
- 390-day FDs: Now offering 7.10%, down from 7.25% (previously available for 400-day FDs)
- 300-day FDs: Reduced from 7.05% to 6.50%
- 303-day FDs: Lowered from 7.00% to 6.40%
- 2 to 3-year FDs: Decreased from 7.00% to 6.75%
- 1204-day FDs: Down from 6.40% to 6.15%
- 1205-day to 5-year FDs: Reduced from 6.50% to 6.25%
What About Old People?
Older adults will continue to get an additional interest rate on fixed deposits for periods not exceeding five years at 0.50% since they are less than 80 years old. For tenures of more than five years, the additional interest will be 0.80%.
On the other hand, super senior citizens (those aged 80 years and above) will enjoy an additional 0.80% interest across all tenures. Currently, after the rates have been revised, their FD rates will be between 4.30% and 7.90%, with some relief in rates between the cuts.
What makes banks slash FD rates?
The largest reason for this is RBI’s monetary stance, favoring a drive toward economic growth through cheaper borrowing. But the legacy of this policy, however, often gives a much lesser return to savers. Although the rate of inflation still is a concern, the real return from FDs (interest minus inflation) has dwindled, thereby making it even more difficult for conservative investors to build their wealth.