When investing in fixed term deposits, you will generally want to look for the bank that offers the highest interest rate. As a rule of thumb, the longer the deposit term, the higher the interest rate.
For example, interest rates on short-term fixed deposits (up to six months) at banks are usually between 3 and 4.5 percent per year. If the term is extended to one year, the interest rate rises to 6 percent. In other words, the interest rate increases slightly as the term increases.
Here is a list of the major banks' interest rates for 5-year fixed deposits.
Top banks offering the highest interest rates on 5-year term deposits:
ICICI Bank: ICICI Bank is offering 7% interest rate on five-year term deposits to the general public. Senior citizens are entitled to 7.5% interest rate on five-year term deposits. These interest rates are applicable from July 12, 2024.
HDFC Bank: This private sector bank is offering an interest rate of 7% on five-year fixed deposits. Senior citizens are entitled to an additional 50 basis points. These rates will be applicable from June 12, 2024.
Kotak Mahindra Bank: Kotak Mahindra Bank is offering interest rates of 6.2% on five-year fixed deposits to the general public and 6.7% to senior citizens. These rates came into effect on June 14, 2024.
Banks General SeniorsICICI Bank 77.5HDFC Bank 77.5Kotak Mahindra Bank 6.26.7SBI 6.57.5*PNB 6.507.00BOB 6.57.15
(*Including an additional premium of 50bps under the “SBI We-care” deposit scheme.)
State Bank of India (SBI): The largest public lender is offering 6.5% interest rate on five-year fixed deposits to the general public and 7.5% interest rate for the same period to senior citizens. These rates came into effect on June 15, 2024.
Punjab National Bank (PNB): The public financial institution will offer 6.5 per cent interest rate for a five-year loan tenure to the general public while senior citizens will be entitled to 7 per cent interest rate as per the interest rates that came into effect on June 10, 2024.
Bank of Baroda (BOB): One of the largest public sector banks, Bank of Baroda is offering 6.5% interest rate on five-year deposits and 7.15% for senior citizens, according to the bank's website. The interest rate came into effect on June 12, 2024.
Note: This story is for informational purposes only. Please consult a SEBI registered investment advisor before taking any investment decision.
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