Highest fixed deposit interest rates on 3-5 year FDs offered by 10 banks

By: |
June 25, 2021 10:52 AM

If you’re planning to invest in an FD for a tenure between 3 and 5 years, here’s a list of 10 banks that are offering the highest interest rates right now.

Senior citizen depositors usually get preferential rates by up to 50 basis points over and above the normal rates.

Assured returns, tenure flexibility, ease and clarity of investment and high liquidity are some of the reasons behind fixed deposits or term deposits being one of the most popular investment instruments in our country. These fixed deposits could also work as collateral for loans or credit cards depending on the terms and conditions of the bank that might prove to be excellent tools for additional liquidity.

However, the Reserve Bank of India’s decision to keep the repo rate unchanged at a low of 4% for over a year now to counter the economic fallout of the Covid-19 pandemic has contributed towards most of the banks reducing their FD interest rates.

The fact that FD returns are fully taxable according to the investor’s income tax slab rate further reduces the net returns. This has been a worrying trend for countless risk-averse investors like senior citizens who often rely on their FD returns not just to meet their financial goals but also for their day-to-day expenses, according to BankBazaar.

That being said, while most of the banks are currently offering interest rates in the range of 4.25% – 5.50% p.a. for normal FDs amounting to less than Rs 1 crore, there are still a few private and small finance banks that are offering above-average returns up to 7.25% p.a.

Investors can consider investing a portion of their funds in the FDs of these banks after a thorough risk assessment, and if doing so is in line with their returns’ expectations and risk tolerance.

So, if you’re planning to invest in an FD for a tenure between 3 and 5 years, here’s a list of 10 banks that are offering the highest interest rates right now. Do note, all the rates mentioned below are applicable to normal FDs amounting to less than Rs 1 crore. Senior citizen depositors usually get preferential rates by up to 50 basis points over and above the normal rates.

10 Banks Currently Offering the Highest Interest Rates on 3 to 5-Year Fixed Deposits

Disclaimer: Data taken from respective bank websites on June 18, 2021. The highest interest rate for FDs with tenures between 3 and 5 years have been considered for data compilation. All interest rates are for normal fixed deposits amounting below Rs 1 crore. Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.

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