Interest on 5-Year FDs

Fixed deposits are ideal investments for conservative, moderate and aggressive investors. They offer guaranteed returns on the deposit made. You can choose to invest in fixed deposits for any tenor ranging from 7 days to 10 years. In case you have a mid-term goal on the horizon, a 5-year FD may be a suitable option. 

 

The FD interest rates for 5 years, however, vary from one bank or NBFC to the next. You can compare the various 5-year FD rates in the market and choose a deposit plan that aligns with your financial requirements. 

 

That said, there is a special kind of 5-year fixed deposit that offers tax benefits. Also known as tax-saver FDs, this kind of deposit has a lock-in period of 5 years. This 5-year fixed deposit is tax-free too, because the amount that you invest in the plan is eligible for a tax deduction up to ₹1.5 Lakh during the financial year, u/s 80C of the Income Tax Act, 1961. 

If you are looking for guaranteed returns that are higher than your savings account or bank FD interest, you can choose to invest in a fixed deposit plan offered by NBFCs. Here is a quick look at the FD interest rates for 5 years, as offered by some of the top NBFCs in the market. You can also check out how different deposit amounts grow via FDs for 5 years. 

Note: The returns mentioned above are an estimate and and intended for informational purposes only. The effective rates are subject to change at the issuer's discretion. Please check the issuer's official website before you open an account.

If you are planning to invest in bank FDs, you need to compare the interest rates offered by different banks today. Here is a preview of the 5-year FD interest rates for SBI, PNB and Axis Bank to give you a fair idea of the rates prevailing in the market today. Check out how different investment amounts grow over a 5-year period. 

Now that you have a better idea of the FD interest rates for 5 years, you may be keen on seeing how to calculate the interest on a 5-year FD. For this, you can use a fixed deposit interest calculator online. Here is what you need to do to compute the interest on an FD with a tenor of 5 years. 

• Step 1: Select the customer category (senior or non-senior citizen). 

• Step 2: Enter the investment amount. 

• Step 3: Enter the investment tenor, which is 5 years. 

• Step 4: Fill in the 5 year FD interest rates. In some cases, the calculator auto-fills the rate of interest. 

• Step 5: Submit these details. 

Once you do this, the FD calculator will display the total interest you will earn along with the total maturity amount at the end of the 5-year period.

 

TheFD calculator uses the following mathematical formula to compute the FD interest: 

 

FD interest = P (1 + r/n)nt - P

 

In this formula, P is the principal amount invested, r is the interest rate, n is the number of times the interest is compounded during one year and t is the investment tenor in years.

This sums up the fundamental things you should know about FD interest rates for 5 years. Check the rates of interest offered by different banks and choose the entity that offers the best FD rates for 5-year deposits. And once you invest, keep in mind that you will continue to earn interest at the said rate throughout the investment tenor. 

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.