When it comes to growing your savings, everyone looks for good returns with minimum risk.
If you want an investment option that is safe, predictable, and stress-free, bank fixed deposits (FDs) continue to be a trusted choice.
Unlike stocks or mutual funds, FDs are not affected by market ups and downs. Once you invest, the interest rate stays fixed for the entire period.
That’s why salaried professionals, senior citizens, and conservative investors prefer fixed deposits.
At present, several banks are offering attractive interest rates of up to 8% on 5-year FDs, making them even more appealing.
Small Finance Banks Offering Higher FD Interest Rates
Small finance banks are currently offering some of the highest FD returns to attract depositors.
These banks may be smaller in size, but they are regulated by the RBI and provide competitive interest rates.
Suryoday Small Finance Bank and Jana Small Finance Bank are offering around 8.00% interest.
Utkarsh Small Finance Bank offers close to 7.50%.
Ujjivan Small Finance Bank and RBL Bank provide around 7.20%.
Equitas, DCB, Capital Small Finance Bank, and SBM Bank are offering interest rates of about 7.00%.
Private Banks: Lower Returns but Better Stability
Private banks usually offer slightly lower interest rates compared to small finance banks, but they are known for better service quality and a strong banking network.
IDFC First Bank offers around 7.00% interest.
ICICI Bank and Tamilnad Mercantile Bank provide close to 6.60%.
Axis Bank offers around 6.45%, while HDFC Bank gives about 6.40%.
Kotak Mahindra Bank and IDBI Bank offer interest rates between 6.25% and 6.35%.
PSU Banks: Safety Comes First
Public sector banks are considered the safest option, especially for senior citizens who prioritize capital protection over higher returns.
Bank of Baroda offers around 6.40% interest.
Punjab National Bank provides about 6.25%.
State Bank of India offers nearly 6.05%.
Union Bank and UCO Bank give around 6.10%.
How Much Will ₹1 Lakh Grow in 5 Years?
If you invest ₹1 lakh in a 5-year fixed deposit at an interest rate of 8%, the maturity amount will be approximately ₹1,48,595.
This means you earn a return of around ₹48,595 over five years.
Additionally, tax-saving fixed deposits offer benefits under Section 80C of the Income Tax Act, allowing you to save tax while earning stable returns.
For investors looking for safety, guaranteed income, and peace of mind, 5-year FDs remain a strong investment option.
