diff --git a/python/cudf/cudf/core/column/decimal.py b/python/cudf/cudf/core/column/decimal.py
index a17cace3c81..a31eaa52641 100644
--- a/python/cudf/cudf/core/column/decimal.py
+++ b/python/cudf/cudf/core/column/decimal.py
@@ -364,18 +364,40 @@ def _get_decimal_type(lhs_dtype, rhs_dtype, op):
     else:
         raise NotImplementedError()
 
+    try:
+        if isinstance(lhs_dtype, type(rhs_dtype)):
+            # SCENARIO 1: If `lhs_dtype` & `rhs_dtype` are same, then try to
+            # see if `precision` & `scale` can be fit into this type.
+            return lhs_dtype.__class__(precision=precision, scale=scale)
+        else:
+            # SCENARIO 2: If `lhs_dtype` & `rhs_dtype` are of different dtypes,
+            # then try to see if `precision` & `scale` can be fit into the type
+            # with greater MAX_PRECISION (i.e., the bigger dtype).
+            if lhs_dtype.MAX_PRECISION >= rhs_dtype.MAX_PRECISION:
+                return lhs_dtype.__class__(precision=precision, scale=scale)
+            else:
+                return rhs_dtype.__class__(precision=precision, scale=scale)
+    except ValueError:
+        # Call to _validate fails, which means we need
+        # to goto SCENARIO 3.
+        pass
+
+    # SCENARIO 3: If either of the above two scenarios fail, then get the
+    # MAX_PRECISION of `lhs_dtype` & `rhs_dtype` so that we can only check
+    # and return a dtype that is greater than or equal to input dtype that
+    # can fit `precision` & `scale`.
+    max_precision = max(lhs_dtype.MAX_PRECISION, rhs_dtype.MAX_PRECISION)
     for decimal_type in (
         cudf.Decimal32Dtype,
         cudf.Decimal64Dtype,
         cudf.Decimal128Dtype,
     ):
-        try:
-            min_decimal_type = decimal_type(precision=precision, scale=scale)
-        except ValueError:
-            # Call to _validate fails, which means we need
-            # to try the next dtype
-            pass
-        else:
-            return min_decimal_type
+        if decimal_type.MAX_PRECISION >= max_precision:
+            try:
+                return decimal_type(precision=precision, scale=scale)
+            except ValueError:
+                # Call to _validate fails, which means we need
+                # to try the next dtype
+                continue
 
     raise OverflowError("Maximum supported decimal type is Decimal128")
diff --git a/python/cudf/cudf/tests/test_binops.py b/python/cudf/cudf/tests/test_binops.py
index 02ca7a0cd58..f688cc3b642 100644
--- a/python/cudf/cudf/tests/test_binops.py
+++ b/python/cudf/cudf/tests/test_binops.py
@@ -1800,7 +1800,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["1.5", "2.0"],
             cudf.Decimal64Dtype(scale=2, precision=3),
             ["3.0", "4.0"],
-            cudf.Decimal32Dtype(scale=2, precision=4),
+            cudf.Decimal64Dtype(scale=2, precision=4),
         ),
         (
             operator.add,
@@ -1809,7 +1809,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", "1.005"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["3.75", "3.005"],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.add,
@@ -1827,7 +1827,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", "1.005"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["-0.75", "0.995"],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.sub,
@@ -1836,7 +1836,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", "1.005"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["-0.75", "0.995"],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.sub,
@@ -1854,7 +1854,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["1.5", "3.0"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["2.25", "6.0"],
-            cudf.Decimal32Dtype(scale=5, precision=8),
+            cudf.Decimal64Dtype(scale=5, precision=8),
         ),
         (
             operator.mul,
@@ -1863,7 +1863,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["0.1", "0.2"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["10.0", "40.0"],
-            cudf.Decimal32Dtype(scale=1, precision=8),
+            cudf.Decimal64Dtype(scale=1, precision=8),
         ),
         (
             operator.mul,
@@ -1872,7 +1872,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["0.343", "0.500"],
             cudf.Decimal64Dtype(scale=3, precision=3),
             ["343.0", "1000.0"],
-            cudf.Decimal32Dtype(scale=0, precision=8),
+            cudf.Decimal64Dtype(scale=0, precision=8),
         ),
         (
             operator.truediv,
@@ -1908,7 +1908,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["1.5", None, "2.0"],
             cudf.Decimal64Dtype(scale=1, precision=2),
             ["3.0", None, "4.0"],
-            cudf.Decimal32Dtype(scale=1, precision=3),
+            cudf.Decimal64Dtype(scale=1, precision=3),
         ),
         (
             operator.add,
@@ -1917,7 +1917,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", "1.005"],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["3.75", None],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.sub,
@@ -1926,7 +1926,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", None],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["-0.75", None],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.sub,
@@ -1935,7 +1935,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["2.25", None],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["-0.75", None],
-            cudf.Decimal32Dtype(scale=3, precision=5),
+            cudf.Decimal64Dtype(scale=3, precision=5),
         ),
         (
             operator.mul,
@@ -1944,7 +1944,7 @@ def test_binops_with_NA_consistent(dtype, op):
             ["1.5", None],
             cudf.Decimal64Dtype(scale=3, precision=4),
             ["2.25", None],
-            cudf.Decimal32Dtype(scale=5, precision=8),
+            cudf.Decimal64Dtype(scale=5, precision=8),
         ),
         (
             operator.mul,