After the RBI cut the repo rate by 25 basis points to 5.25% in its December meeting, several major banks moved quickly to adjust their interest rates.
Following SBI and HDFC Bank, Canara Bank has now revised both its lending rates and fixed deposit (FD) rates.
While borrowers may welcome lower loan rates, depositors may see reduced returns on new fixed deposits.
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Canara Bank Cuts Lending Rates
Canara Bank has reduced its Repo Linked Benchmark Lending Rate (RLLR) by 25 basis points.
The rate has come down from 8.25% to 8.00%, effective December 12, 2025.
This change directly benefits borrowers whose loans are linked to RLLR.
Depending on the loan terms, customers may see lower EMIs or a shorter repayment period.
The bank has also updated its MCLR rates, which apply to loans not linked to the repo rate.
Here are the latest MCLR rates:
Overnight MCLR: 7.90%
One-month MCLR: 7.95%
Three-month MCLR: 8.15%
Six-month MCLR: 8.50%
One-year MCLR: 8.70%
Two-year MCLR: 8.85%
Three-year MCLR: 8.90%
Fixed Deposit Rates Revised Downward
Along with lending rates, Canara Bank has also revised FD interest rates for deposits below Rs 3 crore, effective December 8, 2025.
The bank’s highest FD rate is now 6.15% for a 555-day deposit.
Earlier, customers could earn up to 6.50% on a 444-day FD.
Latest FD Interest Rates at Canara Bank
For general customers and senior citizens, the revised rates are:
7 to 45 days: 3.00%
46 to 90 days: 4.00%
91 to 179 days: 4.25%
180 to 269 days: 5.25% (Senior citizens: 5.75%)
270 days to less than 1 year: 5.50% (Senior citizens: 6.00%)
1 year to 1 year 3 months: 5.90% (Senior citizens: 6.40%)
444 days: 6.00% (Senior citizens: 6.50%)
555 days: 6.15% (Senior citizens: 6.65%)
Above 1 year 3 months to less than 2 years: 5.90% (Senior citizens: 6.40%)
What This Means for Customers
Lower lending rates are good news for borrowers, especially those with home or personal loans linked to the repo rate.
However, FD investors may need to lock in deposits early or explore other options, as returns are gradually coming down.
With more banks expected to follow this trend, interest rates across loans and deposits may continue to soften in the coming months.