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Fixed deposits have always been the most favourite form of investment for Indians. For years, we have been relying on FDs as a safe and secure investment option. They are risk-free and ensure guaranteed returns.
Over the years, several forms of options have come in Fixed Deposits also. There is a lot of flexibility offered in terms of the duration of the FD, interest rates, tax-saving FDs, recurring FDs, and more.In these, 5-year Fixed Deposits are mostly loved by individuals who want to save tax on their investment returns. These long-duration FDs are generally tax-saving FDs, but you can also opt for other types of fixed deposits in this tenure range.
Below, we have listed the banks offering 5-year FD and the interest offered for both general and senior citizens.Top 5-Year Fixed Deposit Rates Offered by Leading Banks
Bank | Interest rate (for general citizens) | Interest rate (for senior citizens) |
|---|---|---|
7.00% p.a. | 7.50% p.a. | |
7.00% p.a. | 7.50% p.a. | |
7.00% p.a. | 7.75% p.a. | |
SBM Bank FD | 7.05% p.a. | 7.55% p.a. |
7.10% p.a. | 7.60% p.a. | |
6.70% p.a. | 7.20% p.a. | |
7.25% p.a. | 8.00% p.a. | |
6.50% p.a. | 7.00% p.a. | |
IDFC First Bank FD | 7.00% p.a. | 7.50% p.a. |
7.50% p.a. | 7.50% p.a. | |
6.50% p.a. | 7.00% p.a. | |
7.25% p.a. | 7.75% p.a. | |
6.60% p.a. | 7.25% p.a. | |
6.50% p.a. | 7.00% p.a. | |
6.50% p.a. | 7.50% p.a. | |
6.50% p.a. | 7.00% p.a. | |
6.50% p.a. | 6.50% p.a. | |
7.00% p.a. | 7.19% p.a. | |
6.25% p.a. | 6.25% p.a. | |
6.20% p.a. | 6.70% p.a. | |
6.20% p.a. | 6.76% p.a. | |
7.25% p.a. | 7.25% p.a. | |
6.50% p.a. | 7.15% p.a. | |
6.00% p.a. | 6.50% p.a. | |
6.50% p.a. | 7.00% p.a. | |
6.00% p.a. | 6.50% p.a. | |
6.25% p.a. | 6.75% p.a. | |
Nainital Bank FD | 5.75% p.a. | 6.25% p.a. |
5.75% p.a. | 6.25% p.a. | |
6.50% p.a. | 6.90% p.a. | |
HSBC Bank FD | 6.00% p.a. | 6.50% p.a. |
7.00% p.a. | 7.50% p.a. |
Top 5 - year Fixed Deposits in Small Finance Banks
Bank | Interest rate (for general citizens) | Interest rate (for senior citizens) |
|---|---|---|
Unity Small Finance Bank FD | 8.15% p.a. | 8.65% p.a. |
7.50% p.a. | 8.10% p.a. | |
Suryoday Small Finance Bank FD | 9.01% p.a. | 9.25% p.a. |
Ujjivan Small Finance Bank FD | 7.20% p.a. | 7.70% p.a. |
Jana Small Finance Bank FD | 7.25% p.a. | 7.75% p.a. |
Au Small Finance Bank FD | 7.25% p.a. | 7.45% p.a. |
Capital Small Finance Bank FD | 7.10% p.a. | 7.60% p.a. |
6.25% p.a. | 6.75% p.a. | |
Equitas Small Finance Bank FD | 7.25% p.a. | 7.45% p.a. |
North East Small Finance Bank FD | 8.00% p.a. | 8.75% p.a. |
Fincare Small Finance Bank FD | 7.25% p.a. | 7.45% p.a. |
Shivalik Small Finance Bank FD | 6.50% p.a. | 7.00% p.a. |
Top 5 - year Fixed Deposits in NBFCs
Bank | Interest rate (for general citizens) | Interest rate (for senior citizens) |
|---|---|---|
PNB Housing Finance FD | 7.65% p.a. (cumulative) | 7.95% p.a. (cumulative up to Rs.1 crore) |
LIC Housing Finance FD | 7.75% p.a. (up to a deposit of Rs.20 crore for cumulative) | 8.00% P.a. (up to a deposit of Rs.2 crore) |
Disclaimer: The interest rates listed above are as of April when this page was written and are subject to change. Please refer to the respective bank’s website or contact the bank for the latest information.
Recommended Read: Best 10 FDs Schemes for 3 Years
Features and Benefits of 5-Year FD
Predictable and Guaranteed Returns:
Unlike stocks or mutual funds, FDs offer a fixed interest rate for the entire tenure. This allows you to know exactly how much you will earn on your investment. Additionally, FDs are generally considered a safe investment, with the principal amount guaranteed by the bank (up to a certain limit) in case of bank failure.Higher Interest Rates Compared to Savings Accounts:
Typically, FDs offer a higher interest ratethan savings accounts. This means your money grows at a faster pace with a fixed deposit.Security and Stability:
FDs are a low-risk investment option. They are suitable for risk-averse investors or those saving for a specific goal in the future, such as a retirement or a child's education.Flexibility in Investment Amount:
There is usually no minimum amount required to open a fixed deposit account. You can invest any amount that suits your budget.Loan Facility:
Many banks provide you the option to take a loan against your FD. This can be helpful in case of emergencies when you need immediate access to funds. However, taking a loan against your FD may reduce the overall interest earned.Tax Benefits:
In some cases, fixed deposits can offer tax benefits. For instance, in India, there are tax-saving FDs under Section 80C of the Income Tax Act, which allow you to deduct a portion of your investment from your taxable income.Easy to Understand and Manage:
FDs are a simple investment product. They are easy to understand and require minimal management compared to other investment options.Factors That Affect the Interest Rates on Fixed Deposits
Time: Longer FDs (like 5 or 10 years) usually mean more interest than shorter ones (like 1 year). This is because the bank gets to use your money for longer.
Bank Needs: If a bank needs more money, they might offer a better interest rate to get you to deposit your cash with them.
Loan Market: When there's a lot of borrowing happening, banks might raise FD interest rates to attract more deposits so they can lend out more money.
Bank Safety: Banks that seem very safe (good credit rating) might offer slightly lower interest rates than banks that seem less safe (lower credit rating). The less safe ones might offer more interest to make up for the risk.
Government Rates: The interest rate the government charges banks (repo rate) affects FD rates too. If the government rate goes up, FD rates usually go up too.
Inflation: This is how much prices generally go up over time. Ideally, you want your FD interest rate to be higher than inflation so your money doesn't lose buying power.
How to Open a 5-Year FD Rates in India
There are two main ways to open a 5-year fixed deposit (FD) in India:
1. Visiting a Bank Branch:
- Choose a Bank: Research and compare interest rates offered by different banks for 5-year FDs using the above tables. Consider factors like reputation, minimum deposit requirements, and any additional features.
- Documents Required: Generally, you'll need your KYC documents (ID proof, address proof, PAN card) and possibly a photograph.
- Fill Out the Application Form: The bank will give you a form where you need to fill in your details, FD amount, tenure (5 years), and preferred interest payout option that can be monthly, quarterly, or at maturity.
- Deposit Funds: Depending on the bank, you can deposit cash, cheque, or transfer funds online.
2. Online Banking:
- Bank Account: You'll need an existing account with a bank that offers online FD opening. Ensure your internet banking is activated.
- Login to Internet Banking: Access your bank's internet banking portal using your login details.
- Navigate to the FD Section: Find the option for opening a fixed deposit.
- Choose Deposit Details: Select "Fixed Deposit" and choose a 5-year tenure. Enter the deposit amount and preferred interest payout option.
- Online Verification: You will have to verify the transaction using a one-time password (OTP) received on your registered phone number.
- Fund Transfer: The required amount will be debited from your linked savings account and your FD will be created.
Disclaimer: This page includes information that has been compiled from many sources and is only offered for informational purposes. Since this type of data might change over time, we cannot guarantee that the information supplied or included within it is accurate. It is anticipated that the user would confirm with the relevant source prior to taking any choices or actions.
FAQs On 5 - Year Fixed Deposit Rates:
1. How much amount can I invest in 5-year fixed deposits?
In a tax-saving FD, the maximum amount you can invest is 1.5 lakh. You can invest more than that in a normal FD.
2. Are all 5-year tenure FDs tax-saving?
No, all 5-year fixed deposits don’t fall under the category of tax-saving. There are other normal FDs too that you can consider for investing.
3. Is the nomination facility available for 5-year fixed deposits?
Yes, most of the banks offer the nomination facility for 5-year FDs.
4. Can I break a 5-year fixed deposit before maturity?
You can break your 5-year fixed deposit before maturity, however, you’ll have to pay a penalty for pre-mature withdrawal.
5. Which is the best 5-year fixed deposit?
All the popular banks including SBI, Bank of Baroda, Kotak Mahindra, YES Bank, and more offer 5-year fixed deposits. You can compare the interest rates and make a decision on where to invest.
6. Is a 5-year fixed deposit available for senior citizens?
Yes, 5-year fixed deposits are available for senior citizens. The interest rate differs and is higher as compared to what is offered for general citizens.
