Fixed deposits are of great value to numerous people. They offer predictable returns to depositors. Therefore, many investment advisors say that common people should keep a part of their total portfolio in fixed deposits, or FD.
Indian banks offer FDs across a huge range of maturity periods from 7 days to 10 years, and depositors choose from the wide array to pick up the instrument that suits their requirements. A significant FD is one that has a 5-year maturity period, since they offer income tax deductions. According to Section 80C of Income Tax Act 1961, the maximum amount that one can invest in these FDs is Rs 1.5 lakh a year. Obviously, it leads to more benefits than the interest rates offered by the deposits, since the amount saved through income tax adds to the entire benefits. Now, let’s see what interest rate some of the major banks are offering to general and senior citizens on 5-year FDs.
SBI, PNB interest rates
On 5-year FDs, SBI, India’s largest bank, offers a rate of 6.5% for general citizens and 7.5% for senior citizens. The second biggest PSU bank in the country, PNB, offers a rate of 6.5% for non-senior citizens and 7.3% for those above 60 years.
Bandhan Bank, Kotak Bank interest rates
The tax-saver FDs carry 7% for general customers of Bandhan Bank and 7.5% for senior citizens. Kotak Bank, on the other hand, pays 6.2% for non-senior citizens and 6.7% to senior citizens.
Bank of Maharashtra, Central Bank interest rates
Bank of Maharashtra offers 6.5% and 7% on FD of 5-year tenure to its general and senior customers. Another PSU bank Central Bank of India pays the same rates on tax-saver FDs.
Union Bank of India, ICICI Bank
To general customers Union Bank of India offers 6.5% interest on tax-saver FDs. To the senior citizens, it offers 7%. The second largest private sector bank in the country, ICICI Bank, pays 7% and 7.5% respectively to general citizens and senior citizens.
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