5-Year Fixed Deposit Interest Rates: An In-Depth Analysis

Factors Affecting 5-Year FD Interest Rates:

• Inflation: The rate of inflation is one of the most significant factors that affect the 5-year FD interest rates. If the rate of inflation is high, the interest rates offered by banks also tend to be higher.

• Monetary Policy: The monetary policy of the central bank of the country also affects the interest rates offered by banks. If the central bank reduces the repo rate, it will reduce the borrowing cost for banks, and they may pass on the benefits to their customers in the form of lower interest rates.

• Economic Growth: The rate of economic growth also affects the interest rates offered by banks. If the economy grows at a healthy pace, the interest rates are likely to be higher.

Comparison Between

Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund

Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund

Guaranteed Return Plans

Returns Before Tax

7.5% ^(TAX-FREE)

Returns After Tax

7.5%

Guaranteed Returns

Yes

Life Cover

Yes

Tax on Profit

Tax Free*

Risk

No Risk

Still Better than FD’s and Debt Mutual Fund

Fixed Deposits

Returns Before Tax

7% ^(TAXABLE)

Returns After Tax

4.8%

Guaranteed Returns

Yes

Life Cover

No

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

No

Life Cover

No

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*For annual premium upto ₹5 Lacs

Why is 5-Year FD an Attractive Investment Option?

• Guaranteed Returns: The biggest advantage of a 5-year FD is its guaranteed returns. The interest rate is fixed for the entire tenure of the deposit, and the investor can expect to receive a stable return on their investment.

• Low-Risk Investment: FDs are considered low-risk investments as they are backed by the government and insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that in the unlikely event of a bank failure, the investor's deposit is protected up to a certain limit.

• Tax Benefits: FDs also offer tax benefits to individuals. The interest earned on FDs is taxed as per the individual's income tax slab, and senior citizens can enjoy an additional interest income of up to Rs. 50,000 per annum, which is exempt from tax.

Variation in 5-Year FD Interest Rates

Interest rates on 5-year FDs can vary depending on the bank and the type of deposit. For example, some banks offer higher interest rates for senior citizens, while others offer lower rates for online deposits. Therefore, it is essential to compare the interest rates offered by different banks and choose the one that offers the best rate of return. The interest rate offered by a bank can also vary based on the amount of deposit made. In general, higher deposit amounts attract a higher rate of interest.

Advantages over Other Investment Options

While there are several investment options available in the market, 5-year FDs offer several advantages over other investment options. For instance, stocks and mutual funds are subject to market risk, and their returns can be unpredictable. On the other hand, 5-year FDs offer a fixed rate of return, making them a comparatively more secure investment option. Additionally, FDs are easy to understand and do not require an exceptional bout the financial market, making them a suitable option for individuals who are new to investing.

Flexibility in Investment

5-year FDs also offer flexibility in investment. For example, Individuals can choose to invest a lump sum or opt for a systematic deposit plan, where a fixed amount is invested at regular intervals. This flexibility makes it easier for individuals to plan their investments and make the most of the interest rates offered.

Penalty for Early Withdrawal

While 5-year FDs offer a fixed rate of return and stability, it is important to consider the penalty for early withdrawal. Most banks charge a penalty for premature withdrawal, which can significantly reduce the return on investment. It is important to understand the terms and conditions of the deposit and the penalty for early withdrawal before making an investment.

Inflation and its Impact

It is also important to consider the impact of inflation on the return on investment. Inflation reduces the purchasing power of money, and if the rate of inflation is higher than the interest rate, the real return on investment may be negative. One must also factor in inflation while choosing an investment option and choose one that offers a return that is higher than the rate of inflation.

Risks Associated with FDs

While FDs are considered low-risk investment options, they are not completely risk-free. For instance, if a bank faces financial difficulties, the deposit may be at risk. Therefore, it is important to choose a financially stable bank with a satisfactory track record. Additionally, the interest rate offered by a bank can be revised, and if the rate of interest is reduced, the return on investment may also be lower.

Comparison of 5-Year FD Interest Rates of Leading Indian Banks:

1. SBI 5-Year Fixed Deposit

   State Bank of India (SBI) is one of India's largest and most trusted banks. The bank offers a 5-year FD option to its customers with an interest rate of 6.25%. SBI's FDs are backed by the government, making them low-risk investments. SBI offers a wide range of tenure options, and the interest rate is competitive compared to other banks. The bank also offers the facility of premature withdrawal, which allows the investor to withdraw their deposit before maturity.

2. HDFC Bank 5-Year Fixed Deposit

   HDFC Bank is one of the leading private-sector banks in India. The bank offers a 5-year FD option with an interest rate of 7%. HDFC Bank's FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring the safety of the deposit. The bank also offers the facility of premature withdrawal, which allows the investor to withdraw their deposit before maturity. The interest rate offered by HDFC Bank is competitive compared to other banks, making it an attractive investment option for individuals.

3. ICICI Bank 5-Year Fixed Deposit

   ICICI Bank is one of the largest private-sector banks in India. The bank offers a 5-year FD option with an interest rate of 7%. ICICI Bank's FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring the safety of the deposit. The bank also offers the facility of premature withdrawal, which allows the investor to withdraw their deposit before maturity. ICICI Bank's interest rate is competitive compared to other banks, and the bank also offers a range of flexible tenure options.

   

4. Axis Bank 5-Year Fixed Deposit

   Axis Bank is one of the leading private-sector banks in India. The bank offers a 5-year FD option with an interest rate of 7%. Axis Bank's FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring the safety of the deposit. The bank also offers the facility of premature withdrawal, which allows the investor to withdraw their deposit before maturity. Axis Bank's interest rate is competitive compared to other banks, and the bank also offers a range of flexible tenure options.

5. Bank of Baroda 5-Year Fixed Deposit

   Bank of Baroda is one of the largest public sector banks in India. The bank offers a 5-year FD option with an interest rate of 6.25%. Bank of Baroda's FDs is backed by the government, making them a low-risk investment option. The bank also offers the facility of premature withdrawal, which allows the investor to withdraw their deposit before maturity. Bank of Baroda's interest rate is competitive compared to other banks, and the bank also offers a range of flexible tenure options.

Conclusion

5-year FDs are an attractive investment option for individuals who are looking for a stable return on their investment. With the interest rate fixed for the entire tenure of the deposit, investors can be confident of receiving a stable return on their investment. With low-risk and tax benefits, FDs are an excellent option for individuals who are looking to secure their financial future.

Bank FD Interest Rates

Bank FD Calculator

NRI-NRE FD Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

DBS Bank FD Interest Rates

Dena Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Expand

Allahabad Bank FD Calculator

Andhra Bank FD Calculator

AU Bank FD Calculator

Axis Bank FD Calculator

Bajaj Finance FD Calculator

Bandhan Bank FD Calculator

Bank of Baroda FD Calculator

Bank of India FD Calculator

Bank of Maharashtra FD Calculator

Canara Bank FD Calculator

Central Bank FD Calculator

Corporation Bank FD Calculator

Equitas Small Finance Bank FD Calculator

HDFC Bank FD Calculator

ICICI Bank FD Calculator

IDBI Bank FD Calculator

IDFC Bank FD Calculator

Indian Bank FD Calculator

Indian Overseas Bank FD Calculator

IndusInd Bank FD Calculator

Karnataka Bank FD Calculator

Karur Vysya Bank FD Calculator

Kotak Bank FD Calculator

Mahindra Finance FD Calculator

OBC Bank FD Calculator

Odisha Gramya Bank FD Calculator

PNB Bank FD Calculator

SBI FD Calculator

Shriram Finance FD Calculator

Syndicate Bank FD Calculator

Tripura Gramin Bank FD Calculator

UCO Bank FD Calculator

Union Bank FD Calculator

Yes Bank FD Calculator

Expand

HDFC NRE FD Rates

Maybank Malaysia FD Rates

SBI NRI FD Rates

Axis NRI FD Rates

Maybank Singapore FD Rates

Yes Bank NRI FD Rates

FAQ's