Fixed deposit is the conventional way of investing money for better returns on specified amount saved. It is the most chosen form of investment by the senior citizen and people who averse from taking the risk. The returns are fixed and so the investor has the surety of getting what has been promised at the end of the tenure. The wide range of time period options allows the depositor to select the period of deposit as per his/her financial goal. From the minimum tenure of 7 days to the maximum period of 10 years, the customer can select any from the range. On each period the rate of interest varies. According to the needs, the customer can plan the investment and calculate the gain. The people who do not need money immediately but also don’t want to invest for a long period can select the medium tenure of 5 years.
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5 year FD Interest Rates
The deposit rate of each Bank differs from the other. Therefore, before opening the deposit account one should compare the FD rates of various banks. The rates offered on 5 years fixed deposit by top banks is given below:
Top 10 Banks Fixed Deposit Interest Rates for 5 years
|Bank Name||On Amount Below ₹ 1 crore||On Amount Above ₹ 1 crore|
|Bank of Baroda||6.50||7.00||5.25||5.25|
|Bank of India||6.25||6.75||4.25||4.25|
5 Year Fixed Deposit Tax-Free
On the term deposit of 5 years, the customer can avail the benefit of tax exemption under section 80C of Income Tax Act, 1961 by opting for Tax Saving Fixed Deposit Scheme. Under this scheme, the depositor’s money is locked in for the minimum period of 5 years. That is, the customer cannot withdraw the money before 5 years. The deposit can be opened with the minimum amount of ₹100. However, the minimum amount may vary from bank to bank, the maximum investment amount is limited to ₹1,50,000. This FD account can be opened only by the individuals and HUFs. Though the customer can hold these FD’s in the single and joint mode of holding but in the case of joint holding, the tax benefit is available only to the first holder. The customer can also avail the nomination facility. But the facility of premature withdrawal and loan against deposit are not available on these deposits.
Tax Saving Fixed Deposit Interest Rates
The interest rate on tax saving FD is same as that on the term deposit made for the period of 5 years. The Bank doesn’t pay any extra interest but provides the tax benefit to the depositor.