Interest rates on 5-year FDs range from 6 percent to 7.90 percent amid Middle East tensions and market volatility

Amid ongoing tensions in the Middle East and volatile stock markets, fixed deposits (FDs) have emerged as a safe option for investors. Major banks and small finance banks are offering returns ranging from 6 percent to 7.90 percent over a period of 5 years.

In this situation, FD is established as a reliable investment vehicle, where the invested amount is safe and returns with a fixed interest rate. Experts also suggest maintaining a balance between safe and risky instruments in the investment portfolio.

Interest rates of major banks on 5-year FDs vary. ICICI Bank currently leads with an interest rate of 6.50 percent. After this, Axis Bank 6.45 percent, HDFC Bank 6.40 percent, Punjab National Bank 6.10 percent, State Bank of India 6.05 percent and Union Bank of India 6.00 percent are offering interest rates.

A 5 year FD with ICICI Bank can earn stable returns. For example, if an investor holds an FD twice for 5 years, the total return can reach around 13 percent.

Small finance banks are also offering attractive interest rates. Suryodaya Small Finance Bank is offering 7.90 percent interest rate on 5 year FD. Other banks have interest rates available in AU Small Finance Bank 6.75 percent, Equitas 7.00 percent, ESAF 5.75 percent, Jana 7.77 percent, Shivalik 6.25 percent, Slice 7.00 percent, Ujjivan 7.20 percent and Utkarsh 7.00 percent.

Suryodaya Small Finance Bank has seen a total return of around 15.8 per cent on two FDs for 5 years each, which presents an option for long-term investment.

The main feature of FD investment is risk-free. Investments remain safe amid stock market volatility and financial planning is easy due to fixed interest rates. It provides long-term stable returns over a period of 5 years.

Investors are recommended to pay attention to the bank’s interest rate and tenure while selecting investments. Big banks like SBI, HDFC and ICICI are safe options while small finance banks are offering high return options. Investors can choose the option according to their financial plan and risk bearing capacity.

It is mentioned that before opening an FD, bank conditions, prepayment rules and tax related provisions should be kept in mind. Investors are advised to consult a financial advisor to ensure long-term gains.