Comparing Fixed Deposit Returns in 2026
For investors prioritizing safe and predictable returns, bank fixed deposits (FDs) remain a popular choice, especially following recent rate revisions. Among public sector banks, Canara Bank and Union Bank of India are offering attractive interest rates, with general citizens seeing over 6.5% on select tenures and senior citizens potentially earning more than 7%.
Canara Bank Fixed Deposit Rates
Canara Bank provides interest rates ranging from 3.00% to 6.60% per annum for general citizens on domestic deposits under Rs 3 crore. Senior citizens can earn between 3.00% and 7.10%. The bank's highest rate for general depositors, 6.60%, is available on its 555-day fixed deposit. Senior citizens benefit from a 7.10% rate on the same tenure. Furthermore, super senior citizens (aged 80 and above) receive an additional 0.10 percentage point on both 444-day and 555-day deposits.
Union Bank of India Fixed Deposit Rates
Union Bank of India offers fixed deposit interest rates from 2.70% to 6.65% for general citizens and 3.20% to 7.15% for senior citizens. Their most competitive rate, 6.65% for general depositors and 7.15% for senior citizens, is also offered on the 555-day tenure, making it one of the most appealing special deposits among public sector banks.
Interest Rate Comparison: Canara Bank vs. Union Bank
When comparing the two institutions, Canara Bank generally holds an edge across several standard fixed deposit tenures:
- 1-Year FD: Canara Bank offers 6.25%, slightly higher than Union Bank's 6.20%.
- 2-Year FD: Canara Bank provides 6.25%, while Union Bank offers 6.15%.
- 3-Year FD: Canara Bank maintains 6.25%, against Union Bank's 6.10%.
- 5-Year FD: Canara Bank's rate is 6.25%, surpassing Union Bank's 6.00%.
However, Union Bank takes a marginal lead on the special 555-day deposit, offering 6.65% compared to Canara Bank's 6.60% for general citizens. For senior citizens, Union Bank's 7.15% on the 555-day tenure is also slightly higher than Canara Bank's 7.10%.
Tax-Saving Fixed Deposits
Both banks provide five-year tax-saving fixed deposits that qualify for deductions under Section 80C of the Income-tax Act. Canara Bank offers 6.25% to general citizens and 6.75% to senior citizens for these deposits. In contrast, Union Bank provides 6.00% and 6.50% respectively. For those looking to combine tax benefits with long-term savings, Canara Bank currently presents a more attractive return.
Which Bank Should Investors Choose?
For investors solely focused on securing the absolute highest headline return, Union Bank's 555-day special deposit offers a slight advantage with 6.65% for general citizens and 7.15% for senior citizens. However, if flexibility across more conventional tenures (one, two, three, and five years) is a priority, Canara Bank proves more appealing, maintaining a consistent 6.25% across these maturities. Canara Bank also stands out for its higher tax-saving FD rates and the additional benefits extended to super senior citizens.
Before making an investment, depositors should carefully consider not only interest rates but also their investment horizon, premature withdrawal policies, and liquidity needs. It is also important to remember that all bank deposits, up to Rs 5 lakh per depositor per bank, are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing an essential layer of protection for your savings.