7.5% FD vs 18% Loan: Which Side Are You On?

Bank of Baroda now offers 7.50% on its 555-day FD. Sounds good — but if you're carrying a personal loan at 14-18%, you're losing money on both ends. Here's how to fix that math fast.

Here's what happened: Bank of Baroda raised interest on its 555-day fixed deposit by 10 basis points to 7.50% per annum for general customers, with senior citizens earning 8.00%.. General customers on callable deposits earn 6.85% and non-callable deposits earn 6.90% — the 555-day special rate is a promotional bucket targeted at medium-term savers.. The rate hike comes even as the RBI has begun a rate-cut cycle, making 7.50% a relatively attractive lock-in before banks reduce FD rates further in 2025-26..

What you should do: Compare: if you have an active personal loan above 14% interest, calculate whether prepaying ₹1 lakh saves more than booking a ₹1 lakh FD at 7.50% — the loan almost always wins.. Lock in now if you have genuine idle savings with no high-cost debt — the 555-day window captures ~18 months of elevated rates before RBI cuts filter into lower FD yields.. Check your loan eligibility before booking: a healthy savings track record (regular FD renewals, no premature breaks) signals financial discipline that lenders factor into personal loan approvals..

If you break an FD early to repay a loan, the penalty (typically 0.50–1%) is still worth it if your loan rate exceeds 12% — the math almost always favours prepayment over holding the FD.