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Business News/ Money / Personal Finance/  Fixed deposits: Top 6 banks offer highest interest rates on their 5-year FDs
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Fixed deposits: Top 6 banks offer highest interest rates on their 5-year FDs

Most banks have an unwritten rule which states that shorter the tenure, lower the interest rate. And longer the tenure, higher the interest rate.

State Bank of India offers 6.5 percent on its five-year FDs whereas for a shorter tenure i.e., one year — the interest rate is 6.8 percent Premium
State Bank of India offers 6.5 percent on its five-year FDs whereas for a shorter tenure i.e., one year — the interest rate is 6.8 percent

At the time of opening a fixed deposits (FDs), one of the key motivations for investors is to earn as high an interest as possible. The rate of interest varies not only from bank to bank but from tenure to tenure.

The unwritten rule is that shorter the tenure, lower the interest rate. And longer the tenure, higher the interest rate. This is generally true.

For instance, when you deposit an FD in State Bank of India (SBI), the rate of interest stands at 5.5 percent on a three-month FD, while it increases to 6.8 percent when the tenure is a 1-year long.

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Here, we give a lowdown on the interest rate offered by top banks on 5-year FD, which is typically the highest rate that the banks offer:

Interest rate on 5-year FDs offered by top banks:

Bank                                     Interest rate on 5-year FD (%)
State Bank of India (SBI)    6.5
ICICI Bank                           7
HDFC Bank                     7
Bank of Baroda                                6.5
Kotak Mahindra Bank              6.2
Punjab National Bank (PNB)6.55

SBI: As one can see in the table above, State Bank of India offers 6.5 percent on its five-year FDs whereas for a shorter tenure i.e., one year — the interest rate is 6.8 percent. These rates came into effect on May 15, 2024.

ICICI Bank: The private lender offers 7 percent on its five-year FD while the short tenure term deposit i.e., for one year gives an interest of 6.7 percent. These rates came into effect on Feb 17.

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HDFC Bank: The largest private bank offers 7 percent interest on five-year fixed deposit whereas the short tenure FD i.e., for one year, the rate of interest is 6.6 percent. These rates came into effect on Feb 9, 2024.

Bank of Baroda (BOB): The state lender offers 6.50 percent on 5-year fixed deposit while the one-year FD offers 6.85 percent per annum. These rates came into effect on Jan 15, 2024.

Kotak Mahindra Bank: This bank offers 6.20 percent on its five-year fixed deposit whereas the one-year FD offers 7.10 percent. These rates came into effect on Feb 27, 2024.

Punjab National Bank (PNB): The state lender gives 6.55 percent on its five-year fixed deposit while the short tenure fixed deposits i.e., for one year give an interest of 6.8 per cent. These interest rates came into effect on April 12, 2024.

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Published: 04 Jun 2024, 11:35 AM IST
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