FD Interest Rates: Banks offering highest interest rate on 5-year FDs

Fixed deposits (FD) are among the safest and most popular investment options. Investors will receive assured returns that will not be influenced by market volatility. The invested amount will receive a fixed rate of interest at maturity.

For a period ranging from 7-14 days to 10 years, you can pick a fixed deposit, also known as a term deposit. When you open a fixed deposit account at a set interest rate, you are guaranteed that the rate of interest will remain constant, regardless of market volatility.
Depending on your preference, the interest you earn is paid at maturity or on a recurring basis. You are not permitted to withdraw the funds prior to the maturity date. You must pay a penalty if you wish to do so.


Bank FD interest rates

Bank Name	5 Year	Qly Compound Return
Indusind Bank	6.50	13804.20
RBL Bank	6.30	13669.00
DCB Bank	6.25	13635.39
IDFC First Bank	6.25	13635.39
Karur Vysya Bank	5.80	13336.47

Tax saving FD interest rates

Bank Name	Tax Saving	Qly Compound Return
Indusind Bank	6.50	13804.20
RBL Bank	6.30	13669.00
DCB Bank	6.25	13635.39
IDFC First Bank	6.25	13635.39
Karur Vysya Bank	5.90	13402.36

Difference between Tax-saver Bank FD & Regular FD
Under Section 80C of the Income Tax Act, 1961, money invested in a tax-saving bank FD is eligible for a deduction of up to Rs 1.5 lakh, subject to a 5-year lock-in period. These tax-saving FDs, however, have a lock-in period and a maximum tenure of 5 years, so there is no option to withdraw money early.

A 5-year tax saver FD can be opened with a minimum of Rs 100 and multiples thereof, up to a maximum of Rs 1.5 lakh.

A regular bank FD has no lock-in period and is not eligible for a deduction under Section 80C of the Income-Tax Act, 1961. In the case of a regular bank FD, the minimum investment amount and interest rates vary with each bank. Premature withdrawal is allowed if you book a regular fixed deposit for up to 5 years that is not part of the tax-saver FD plan, however, there is a penalty that varies by bank.

Forms to submit to avoid Tax Deduction at Source
If you have no other sources of income than interest, you can file a declaration under Section 197A of the Income Tax Act in Form 15-G (for general or non-senior citizens) or Form 15-H (for senior citizens) to avoid TDS.

Additionally, spread your bank FDs between branches of the bank to minimise TDS. You can also address your liquidity demands by splitting bank FDs into various tenures.