5 Year Fixed Deposit Interest Rates

A savings account offers you financial security with a predetermined interest rate, but what about maximising your returns? With many Banks and NBFCs offering you the best FD rates over a span of 5 year savings scheme, you can enjoy high returns with compounding interests.

Furthermore, several Banks and NBFCs offer 5 year FDs with tax benefits and special value addition for senior citizens.

Now getting an FD of your choice from your preferred bank is easy. And getting a FD at an interest rate you wish is even easier through banks and NBFCs. So, compare the different 5 year fixed deposit interest rates offered by Banks and NBFCs to get best FD rates for 5 years.

Invest in a 5 year FD with Shriram Finance, offering you the best FD rate for 5 years with 8.47% interest.

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Top Banks Offering Best FD Rates for 5 Years

Securing a competitive interest on your FD can ensure you get high and impressive returns. So, choosing the right bank is crucial as you can get plenty of benefits along with flexible liquidity options and tax benefits. Given below are the top banks offering the best FD rates for 5 years maturity period.

Best FD Rates For 5 Years in Public Sector Banks

Public sector banks offer you a safe and reliable option for you to earn high interest rates on your investments. Here are the 5 year fixed deposit interest rate offered by public sector banks:

Public Sector Banks Interest Rates (p.a)
Punjab & Sind Bank 6.00%
Indian Overseas Bank 6.50%
Bank of Baroda 6.00%
Bank of India 6.70%
Canara Bank 6.25%

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*Note- The interest rates are subject to change. Please check the official website for the latest information.

FD Interest Rates For 5 Years in Private Sector Banks

Private sector banks are known for their customer centric services and their attractive interest rates. You can get lucrative returns on your 5 year FDs with private sector banks. Here are the top private banks that are giving the best FD rates for 5 years:

Private Sector Banks Interest Rates (p.a)
IndusInd Bank 7.25%
RBL Bank 7.10%
Bandhan Bank 5.85%
Kotak Mahindra Bank 6.20%
Karur Vysya Bank 6.50%

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Note:The interest rates are subject to change. Please check the official website for the latest information.

Best FD Rates For 5 Years in Small Finance Banks

Small finance banks are known for their high interest rates offering you attractive returns on your FD deposit. These banks are reliable, giving you maximum growth and flexible liquidity options. Here are the best FD rates for 5 years given by small finance banks:

Small Finance Banks Interest Rates
Shivalik Small Finance Bank Limited 6.50%
Jana Small Finance Bank 7.25%
Ujjivan Small Finance Bank 7.20%
Equitas Small Finance Bank 7.25%
Utkarsh Small Finance Bank 7.75%

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Note:*Note- The interest rates are subject to change. Please check the official website for the latest information.

Best FD Rates For 5 Years in top NBFCs

NBFCs have become a popular alternative for you to invest in a fixed deposit for 5 years. You can earn high interest rates compared to public banks, thereby earning lucrative returns on your investment. Given below are the NBFCs offering the best FD rates for 5 years:

NBFCs Interest Rates (p.a)
Shriram Finance 8.47%
Bajaj Finance Ltd. 8.10%
Mahindra Finance Ltd. 8.05%
LIC Housing Finance 7.75%
PNB Housing Finance Ltd 7.65%
Note-The interest rates are subject to change. Please check the official website for the latest information.

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5 Years FD Maturity Amount Calculator

Investing becomes easier if you know the kind of amount you would receive upon maturity. FD Online calculator is a simple online tool used to help you simplify the calculation through few steps to avail the final maturity amount. To calculate the maturity amount, banks and NBFCs provide an online calculator to make it easier for you to know your estimated maturity amount. The FD calculator will give you accurate projections of your investment.

The FD calculator is easy to use, all you have to do is enter the deposit amount, maturity period and the interest rate. You will then get the estimated maturity amount.

Maturity Date :  
Invested Amount :  ₹10,000
Interest Amount :  ₹666
Maturity Amount :  ₹10666

You can check the interest earned on different deposit amounts from different banks. Check the links in the table below:

Calculate your FD maturity amount manually

You can also get the estimated maturity amount by calculating manually using the formula:

A = P*(1+r/n)^(nt)

A = maturity amount
P = deposit amount
r = rate of interest
n = number of times the interest is compounded
t = maturity period

Here is an example to calculate the maturity amount if P is ₹1,00,000
r be 7.00% = 0.07, n is 1 time a year, t is 5 years

Using the formula,

A = P*(1+r/n)^(nt)
A=1,00,000 x (1+0.07)1 x 5
A=1,00,000 x (1+0.07) 5
A=1,00,000 x (1.07) 5

From the calculation above, you can understand that for an investment of ₹1,00,000 at a rate of 7.00% for 5 years, you can get an estimated maturity amount of ₹1,42,478.

Factors Influencing FD Interest Rates

Many factors influence the 5 years fixed deposit interest rate. Knowing these factors can help you get higher interest rates and maximise your returns. To get the best FD rates for 5 years, you can consider the following factors:

  • RBI policies: The Reserve Bank of India sets the Repo rates by which banks base and set their interest rates for FD. When RBI increases the Repo rate, banks and NBFCs will also increase the interest rates and vice versa.
  • Credit demand and supply: The demand for loans by the customers also affects the interest rates of fixed deposits. When the demand for loans is high, banks will increase the FD rates to attract more investors to provide funds for the loans. When demands are low, banks will decrease their interest rates.
  • Competition among banks: With increased competition among banks, banks and NBFCs will increase FD rates to attract more investors.
  • Economic condition: The overhealth of the country’s economy directly impacts the interest rates. A good economy will result in higher interest rates as there is more demand for credit. While during a bad economy, the interest rates will decrease as there is less demand for credit.

How to Choose the Right FD for 5 Years

Choosing the right FD for 5 years is essential as you can maximise your returns and achieve your financial goals. When choosing between various banks and their interest rates, here are some key points to take into considerations:

  • Interest rates: Consider the interest rates offered by the banks, some banks will offer higher interest rates for a 5 year period compared to other banks. So, research all banks and NBFCs that are offering FDs for your chosen period and choose one that offers the best FD interest rate for 5 years.
  • Bank and NBFC credibility: The bank and NBFCs’ reputation and financial health is crucial to consider when considering an FD for 5 years. Public and private banks will be safer options as they are well established and trusted by customers. Before investing, consider knowing the bank’s credit rating and customer reviews.
  • Compounding frequency: Banks and NBFCs offer various compounding frequencies. Some will offer monthly, quarterly or annual compounding of the interest rates. A higher frequency will result in higher returns. So consider investing in a bank that offers more compounding frequency.
  • Tax benefits: Banks offer tax benefits for 5 year FDs under the Income Tax Act, 1961. You can claim a deduction of up to ₹1.5 lakhs in one financial year for a 5 year FD.
  • Premature withdrawal penalties: Consider the liquidity options offered by banks and NBFCs on your FD for 5 years. In case of an emergency where you need to take out your FD deposit before the maturity period, there will be a penalty charged. So, choose a bank or NBFC that offers lower penalty charges so it will minimise the impact on your maturity amount.

Tax Implications of 5 Years FDs

The interest you earn on your fixed deposits can be taxed, so understanding the implications of your FD deposit can help you maximise the returns on your investment. It is also important to know that various banks offer a 5 year FD with tax benefits. Here are the implications and benefits of a 5 year FD:

  • Tax on interest: The interest earned on an FD is taxable and is applicable to your investment based on your income bracket. So, if you fall under the 20% tax bracket, you will be taxed 20% on the interest you earn.
  • Tax deducted at source (TDS): In case your interest exceeds a certain threshold, the bank will deduct the tax at source from your FD account. The bank will deduct tax if you cross ₹40,000 in interest (below the age of 60 years) and ₹50,000 if you are above the age of 60 years old.
  • Tax benefits: Most banks and NBFCs offer tax benefits for 5 year FDs, where you can get a tax deduction of up to ₹1.5 lakhs under Section 80C of the Income Tax Act, 1961.

Check more on fixed deposits from the links provided in the table below:

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How to Open a 5 Years FD Account

Opening your 5 year FD account has become simpler as most banks and NBFCs offer both the online and offline option to open an account. Below are the steps to open your FD account:

Steps to Open Your 5 Years FD Account Online

  • Step 1: Go to your chosen bank's website and find the FD section to open your FD account.
  • Step 2: Fill out the online application, enter your KYC (Know Your Customer) details, investment amount, and choose the 5 years maturity period.
  • Step 3: Upload the scanned copies of your required documents like ID proof, address proof, and PAN card.
  • Step 4: Transfer the investment amount from your savings account to the new FD account using online banking, UPI or other secure payment methods.
  • Step 5: The bank will verify your documents and process your application. You will then receive confirmation that your 5 years fixed deposit account is active.

Steps to Open Your 5 Years Fixed Deposit Offline

  • Step 1: Visit your preferred bank branch and inform the bank representative that you want to open a 5 years FD.
  • Step 2: Complete the application form and submit copies of your ID proof, address proof, and PAN card.
  • Step 3: Deposit the amount for your investment or make a transfer from your savings account to the new FD account.
  • Step 4: The bank will then process your application, verify your documents, and activate your FD account.
  • Step 5: When the account is activated, you will receive a confirmation email or a physical slip with account details.

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Frequently Asked Questions

Shriram Finance is currently offering the highest FD rate of 8.47% p.a. for a maturity period of 5 years.

Yes, a 5 year FD is a good investment if you are looking for a low-risk investment option for a long-term plan.

No, the interest on a 5 year FD is taxable, however, a 5 year FD also offers tax deductions of up to ₹1.5 lakh under the Income Tax Act.

Yes, a 5 year FD is eligible for tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act, 1961.

You can find the best FD rates for a 5 year FD by researching and comparing different rates offered by banks.

Yes, you can withdraw your funds before the maturity date of your FD, however, there will be a penalty charged on your maturity amount.

Yes, various banks and NBFCs charge a penalty amount for premature withdrawal of your FD.

Yes, different banks offer different FD rates for a 5 year maturity period.

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