Best 5-Year Fixed Deposits in India
Lovely has continuously been investing in a recurring deposit; she has a stable source of income and has collected quite a fortune over the last few years. She was advised to invest in mutual funds, but she was not ready to bear the risks of investing in mutual funds. She wanted a long-term investment with minimal risks. Someone advised her to open a 5 year fixed deposit account. She was confused about what a 5 year fixed deposit is. She wanted to search and invest in the best 5 year fd interest rates.
Do you, too, have some extra cash you are looking for investing? The best and risk-free option to invest in a lump sum is by starting a 5 year fd. Keep reading this blog post to know the best 5 year fd rates in India 2021.
What is a Fixed Deposit or FD Account?
A fixed deposit is a financial vehicle or instrument in which a lump sum amount of money is deposited for some time, and on that deposited money, returns are gained. A 5 year fd provides with utmost safety to your deposited money. A 5 year fixed deposit is offered by financial institutions like banks and non-banking financial companies called NBFCs. Before opening a 5 year fixed deposit account, it is advised to check the best 5 year fd interest rates.
The best 5 year fd rates will ensure guaranteed returns on the maturity of the fixed deposit after the lock-in period is over. The best part about investing in fixed deposits is that the interest rate remains unchanged even if there is fluctuation in the market. But, one minor drawback of investing in a fixed deposit is that you can’t withdraw money before the fixed deposit plan or scheme matures.
Best Fixed Deposit Schemes for 5 years in India 2021
Following the list of the best schemes for 5 year FD interest rates. Let us look at the 5 year FD rates provided by these best banks in India 2021-
- Axis Bank: This bank offers the highest 5 year fd rates presently for 5-year tenure fixed deposit plans. For the general public, the interest rate is 5.40% per annum, and for senior citizens, the interest rate is 6.05% per annum.
- Canara Bank: This bank offers the second-highest 5 year fixed deposit rates presently for 5-year tenure fixed deposit plans. For the general public, the interest rate is 5.25% per annum, and for senior citizens, the interest rate is 5.75% per annum.
- IDFC First Bank: This bank offers the third-highest 5 year fd rates presently for 5-year tenure fixed deposit plans. The interest rate is 5.20% per annum for the general public, and the interest rate is 5.70% per annum for senior citizens.
- State Bank of India: If you are opening a 5 year fixed deposit account, this bank currently offers the fourth-highest 5 year fd rates for 5-year tenure fixed deposit plans. The interest rate is 5.30% per annum for the general public, and the interest rate is 5.80% per annum for senior citizens.
- Union Bank of India: This bank offers the fifth-highest 5 year fd rates presently for 5-year tenure fixed deposit plans. For the general public, the interest rate is 5.40% per annum, and for senior citizens, the interest rate is 5.90% per annum.
Features and benefits of Fixed Deposit (FD) Account
- In a fixed deposit, the returns on the investment are assured even if there is market fluctuation. This investment mechanism is risk-free and safe for people new to investing money.
- This investment has almost no risk or minimal risk of your invested principal from getting lost.
- It has been seen that the highest 5 year fixed the non-banking financial companies or NBFCs offer deposit rates.
- Fixed deposits offer a feature of renewing the existing fixed deposit scheme or plan. Continuing your project or scheme can help you get additional rate benefits.
- At the source of the interest, income tax is deducted as per the Income Tax Act of 1961.
- You can manage your daily expenses by opening up a 5 year fixed deposit account as there is an option for periodic interest payouts.
- This is very beneficial for senior citizens, i.e. for people above 60 years, as they get the highest fixed deposit rates.
If you have some lump sum money and you are looking for financial instruments to invest in, it is best advised to go for a 5 year fixed deposit scheme or plan. Before investing in a fixed deposit, it is recommended to check the best fd interest rates for 5-year tenure that all banks provide. You can choose from a wide range of schemes and terms from the banks or NBFCs listed above or take help from your financial advisor to select a plan or scheme that is best suited to cater to your needs.
What are the two types of fixed deposit rates?
There are mainly 2 two types of interest rates on fixed deposits offered by banks or NBFCs in India-
1. Flexi FD Interest Rates- in this, the depositor links his savings account with their fd account. This is also called sweep in- sweep out a fixed deposit as the money moves in between these two accounts. This fd interest rate helps the deposit to earn the highest returns on the investment.
2. Regular FD Interest Rates- they are the regular fd that has a fixed tenure.
What factors impact the fixed deposit rates in India?
Factors like the present scenario of the Indian as well as the world economy, the monetary policy of the Reserve Bank of India, and the effect of recession and inflation have a major impact on the rate of interest of the fixed deposits in India.