Before you decide to open a fixed deposit (FD) account in a bank, it is incumbent upon you to compare the interest rates offered by different banks.
The interest rates usually do not vary much from lender to lender. However, there is a rule of thumb that applies to most lenders uniformly —the longer the tenure, the higher the interest rate.
Here we list out the top six banks that offer high rates of interest on their five-year FDs.
I. State Bank of India (SBI): SBI offers 6.5 per cent on its five-year fixed deposit to regular citizens, whereas senior citizens are entitled to receive 7.5 per cent.
However, the country's largest lender offers the highest rate (7 per cent) on its FD with a tenure of 2-3 years. Senior citizens are entitled to receive 7.5 per cent for this tenure.
II. Bank of Baroda (BOB): This state lender offers 6.5 per cent on its five-year fixed deposit (FD) and 7.15 per cent to senior citizens for this tenure.
Meanwhile, the highest rate of 7.25 per cent is offered on an FD of 399 days (Monsoon Dhamaka deposit scheme) to regular citizens and an extra 50 basis points to senior citizens.
III. HDFC Bank: The largest private lender in the country offers 7 per cent to regular citizens and 7.5 per cent to senior citizens on its five-year fixed deposit whereas the highest interest rate (7.4 per cent) is offered on an FD of 55 months to regular citizens and an extra 50 basis points to senior citizens.
| Bank | Regular (%) | Senior citizens (%) |
| SBI | 6.5 | 7.5 |
| BOB | 6.5 | 7.15 |
| HDFC | 7 | 7.5 |
| ICICI | 7 | 7.5 |
| KMB | 6.2 | 6.7 |
| PNB | 6.5 | 7 |
IV. ICICI Bank: ICICI Bank offers 7 per cent and 7.5 per cent interest to regular and senior citizens on its 5-year fixed deposit. The highest rates (7.25 per cent and 7.8 per cent) are offered on mutual funds with tenure between 15 and 18 months.
V. Kotak Mahindra Bank: It offers a relatively low interest rate of 6.2 per cent and 6.7 per cent to regular and senior citizens, respectively. The highest interest rate of 7.4 per cent is offered on an FD of a 390-day tenure.
VI. Punjab National Bank: PNB offers 6.5 and 7 per cent to regular and senior citizens respectively, whereas the highest interest rate of 7.25 per cent is given on an FD of 400 days.
So, it is interesting to note that all these six banks offer the highest interest rates on a tenure which is shorter than that of five years.
