Five-year fixed deposit interest rate: Check what the top six banks offer as of June 2024

As an essential factor, Interest rates on fixed deposits (FDs) help in deciding how much an investor is likely to earn on a lump sum deposited for a specific lock-in period or maturity tenor. Also, banks are known to offer different interest rates on FDs, with rates varying proportionally on the duration of the deposit.

It is to be noted that senior citizens earn an additional 0.50- 0.75% interest rate on FD investments compared to others.

Here’s a list of interest rates on fixed deposit schemes provided to general citizens by a few major scheduled banks of India for deposits up to ₹2 crore and maturity tenors of up to five years.

There are a few factors to consider when opting for the best FD scheme that is proportional to an individual’s financial goals, which include:

In the fixed-income investment space, FDs are known to offer guaranteed returns. These are regarded as relatively safe compared to other market-linked products. Also, FDs are an effective way of protecting emergency funds from market volatility while acting as a hedge against inflation.

However, an investor should be aware of certain conditions before investing in FDs. For example, only about ₹ 5 lakh is guaranteed as per the rules of the Reserve Bank of India’s (RBI’s) Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that in case a particular bank faces any issues, an investor’s deposits of about ₹5 lakh in a bank would be regarded as secure.

This ₹ 5 lakh limit remains inclusive of interest and the principal amount. Any particular bank that faces an issue is mandated to return the money to depositors within three months or 90 days.