Fixed Deposits (FDs) are a popular investment option in India, known for their security, guaranteed returns, and simplicity. Whether you’re a seasoned investor or just starting, FDs offer a safe place to park your funds while earning a fixed interest over a set period. One of the most crucial factors for any investor when choosing an FD is the interest rate, as it directly determines the returns on your investment.
FDs, particularly those with a 5-year tenure, are a favorite among conservative investors who seek long-term stability. The interest rates on these deposits can vary significantly depending on the bank you choose. In this blog, we will delve into the top six banks offering the highest interest rates on 5-year FDs, ensuring that you can make an informed decision to maximize your returns.
Current Interest Rate (5 Years) : 6.50% per annum
Senior Citizen Rate : 7.00% per annum
State Bank of India (SBI), the country’s largest public sector bank, offers a competitive interest rate of 6.50% on 5-year Fixed Deposits for regular customers. Senior citizens are offered an additional 0.50%, bringing the rate to an attractive 7.00%.
SBI’s FD scheme comes with a range of benefits, such as easy access to loans against the FD and options for premature withdrawal, albeit with a penalty. Additionally, SBI provides the convenience of automatic renewal upon maturity, ensuring that your money continues to earn interest without interruption.
The bank also offers a tax-saving FD scheme under Section 80C of the Income Tax Act, which allows investments up to ?1.5 lakh to qualify for tax deductions.
- Loans available against FD
- Premature withdrawal facility with penalties
- Automatic renewal option
- Tax-saving FD option for eligible investments
Current Interest Rate (5 Years) : 7.00% per annum
Senior Citizen Rate : 7.75% per annum
HDFC Bank is one of the top private sector banks in India, known for offering excellent customer service and attractive FD interest rates. For a 5-year FD, HDFC Bank offers 7.00% interest to regular customers and a higher rate of 7.75% to senior citizens.
HDFC Bank FDs are flexible, allowing you to choose between different interest payout options—monthly, quarterly, or cumulative. This flexibility makes it a great choice for individuals who rely on FD interest for regular income. The bank also offers an overdraft facility against the FD, providing liquidity without the need to break the deposit.
HDFC Bank’s FDs can be opened and managed online, making the entire process convenient. Additionally, HDFC is known for its high credit rating, ensuring that your investment is safe and secure.
- Flexible interest payout options
- Loan/overdraft facility up to 90% of the FD amount
- Secure with AAA credit ratings
- Online FD opening and management
Current Interest Rate (5 Years) : 6.90% per annum
Senior Citizen Rate : 7.40% per annum
ICICI Bank is another top private sector bank offering competitive interest rates on 5-year FDs. Regular customers can enjoy a rate of 6.90%, while senior citizens benefit from a higher rate of 7.40%.
ICICI Bank provides multiple interest payout options, allowing you to choose between receiving interest monthly, quarterly, or at maturity. The bank also offers an easy nomination process and a loan or overdraft facility up to 90% of the FD amount, ensuring that liquidity is available if needed without breaking the FD.
The ease of booking and managing FDs online through ICICI Bank’s net banking and mobile apps adds to the convenience, making it a favorite among tech-savvy investors.
Key Features:
- Competitive interest rates
- Loans/overdrafts available against FD
- Premature withdrawal allowed with penalties
- Multiple interest payout options
Current Interest Rate (5 Years) : 6.85% per annum
Senior Citizen Rate : 7.35% per annum
Bank of Baroda (BoB) is a leading public sector bank, known for its reliability and competitive FD interest rates. BoB offers a standard interest rate of 6.85% on 5-year Fixed Deposits for regular customers, while senior citizens can enjoy an increased rate of 7.35%.
BoB FDs offer a wide range of benefits, such as multiple interest payout options (monthly, quarterly, or cumulative), and loans or overdrafts of up to 90% of the deposit amount. These features make BoB FDs ideal for investors looking for both security and liquidity.
One of the highlights of BoB’s FD scheme is its ease of management. Investors can easily open, renew, or break FDs online using BoB’s internet banking and mobile apps. BoB also offers a tax-saving FD option under Section 80C, which allows for tax deductions on investments up to ?1.5 lakh.
Moreover, being a government-owned bank, BoB ensures that your deposits are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC) for amounts up to ?5 lakh, providing extra security.
Key Features:
- Loans/overdraft facility up to 90% of FD amount
- Flexible interest payout options
- DICGC insurance for up to ?5 lakh
- Tax-saving FD option available
Current Interest Rate (5 Years) : 6.75% per annum
Senior Citizen Rate : 7.25% per annum
Kotak Mahindra Bank is one of India’s newer private sector banks, yet it has quickly become a strong player in the banking industry. Kotak offers a competitive 6.75% interest rate on 5-year FDs for regular customers and 7.25% for senior citizens.
Kotak Mahindra Bank provides flexible options for interest payouts, with choices between monthly, quarterly, and cumulative payouts. Additionally, the bank offers a loan and overdraft facility of up to 90% of the FD value, making it a great option for investors looking for liquidity alongside fixed returns.
Kotak’s FDs can be opened and managed easily through the bank’s digital platforms, ensuring convenience for customers who prefer online banking. For those looking for tax savings, Kotak also provides a tax-saving FD scheme eligible for deductions under Section 80C of the Income Tax Act.
Key Features:
- Flexible interest payout options
- Loans/overdrafts up to 90% of FD amount
- Tax-saving FD scheme available
- Easy online FD management
Current Interest Rate (5 Years) : 6.70% per annum
Senior Citizen Rate : 7.20% per annum
Punjab National Bank (PNB), one of India’s oldest and most trusted public sector banks, offers a 6.70% interest rate on 5-year FDs for regular customers and 7.20% for senior citizens. PNB FDs are a great option for conservative investors who prioritize security alongside decent returns.
The bank offers flexible interest payout options and allows premature withdrawal, though a penalty may apply. Customers can also avail loans or overdrafts of up to 90% of the FD amount, providing liquidity in times of need without breaking the deposit.
PNB also offers a tax-saving FD option that qualifies for deductions under Section 80C of the Income Tax Act. Additionally, like most public sector banks, PNB FDs are covered by DICGC insurance, ensuring that deposits up to ?5 lakh are safe.
Key Features:
- Loans/overdraft facility up to 90% of FD amount
- Flexible interest payout options
- DICGC insurance for added protection
- Tax-saving FD option available
Fixed Deposits remain a preferred investment choice for those seeking guaranteed returns and safety. The banks mentioned above offer some of the highest interest rates on 5-year FDs, making them attractive options for long-term investors. Whether you prioritize a higher interest rate, the flexibility of withdrawal, or the security of government-backed schemes, these banks provide a range of options to suit your financial goals.
While senior citizens enjoy higher interest rates across the board, regular customers too can earn decent returns on their 5-year deposits. Before making a decision, always compare the features offered by different banks, such as interest payout options, loan facilities, and premature withdrawal terms. This will ensure that your FD investment aligns with your financial needs, providing both security and optimal returns.
By carefully selecting the right bank and FD scheme, you can enjoy a safe, steady, and rewarding investment experience over the next five years.
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