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Best 5-Year Fixed Deposits in India (2019) Research Team | Posted On Thursday, September 26,2019, 05:33 PM

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Best 5-Year Fixed Deposits in India (2019)



If you are looking for tax savings and safe investment avenue to keep your money then a tax-saver FD is the right choice for you. A tax-saver FD comes with the additional benefit of tax deduction along with the features like nomination facility, loan on FD and better interest rate.

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Best 5-Year Fixed Deposits in India (2019)

Who can invest?

You can open a fixed deposit in a bank where you already have a savings account. 5-year fixed deposits are an ideal investment option for people who are looking for risk-free avenues to park their surplus funds. Listed below are some categories of investors who can invest in tax-saver FDs:

  • Retirees who wanttax deduction as well as capital protection on their savings
  • People who want to invest their surplus cash lying idle in their savings account.
  • People who want to reduce their tax outgo on FDs can invest
  • HUF are also eligible to invest in 5-year tax-saving FDs.

See Also: What is meant by Fixed Deposit?

Minimum and maximum investment amount:

You can open a 5-year fixed deposit in any bank. The lower limit on these deposits varies from bank to bank and generally ranges from Rs. 1,000 to Rs. 10,000. Retirees can deposit money in FDs to ensure a uniform flow of income. The maximum amount is Rs. 1.5 lakh in a financial year which is the ceiling for tax saving investment under section 80C of the Income Tax Act, 1961.

Interest payments:

The rate of interest for a specific tenure is of utmost importance for the investors. The maturity amount that you will receive is directly proportional to the fixed deposit interest rate paid by your bank. The rate offered by banks for 5-year fixed deposit better than FDs with maturity less than 5 years. Majority of the commercial banks are offering interest rates ranging from 6.25% to 7.85% on 5 year FDs.

Banks also offer a slightly higher interest rate to senior citizens than normal citizens. Banks have devised special interest rates for senior citizens as they depend on interest earned from FDs and other investments. As retirees have no other source of income they need the interest income to fulfil their necessities and their monthly expenditure.

Top 5 tax-saving bank FD rates:

The Best fixed deposit interest rates offered by saving banks for 5-year FDs are listed in the table below:

Name of bank

The Interest rate for normal citizens

The Interest rate for senior citizens




Axis Bank



IDFC first Bank



Bankdhan Bank



Laxmi Vilas Bank



Tenure of FD:

Fixed deposits offer flexibility to the depositors in terms of tenure. As an investor you can choose to deposit money for 7 days to 20 years in FD depending on your liquidity requirements.

As an investor, you must know that the time for which you deposit your money is an important aspect. You must select a fixed deposit depending on your financial goals. Therefore, if your goal is to reduce your tax outgo then you can invest in a 5-year tax-saving fixed deposit.

Banks pay a higher interest rate on 5-year deposits. Compounding of interest will help you get better returns along with tax efficiency. However, premature withdrawals are not allowed on such FDs as they are locked-in for the tenure of 5 years.

If you have no immediate expenditure or your finances are stable then you can invest your money in a tax-saver FD to earn higher interest that will be accumulated and paid at the time of maturity.

Type of holding:

The 5-year tax saver FDs can be held in a single name or jointly with spouse or children or parents. In case you have opened a joint account, the tax benefit can be availed by the primary accountholder only, as mentioned in the FD certificate.

See Also: Types of Fixed Deposits


As per the current tax laws, if you invest in tax saving FD then you can claim a tax deduction of up to 1.5 lakh in a financial year. This deduction is available as per section 80C of the Income Tax Act. The upper limit for such investments is capped at Rs. 1.5 lakh. It is one of the few investment avenues for investors that can be used to claim a tax break on their FD income.

Nomination facility:

The nomination facility is available on tax saver fixed deposit. HUF, single or joint account holders can appoint a nominee on such investments. Only one person can be appointed as nominee for single as well as joint accounts.

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