Looking for safe returns? These banks are offering up to 8% interest on 5-year FDs

When it comes to investing, most people look for safety with assured returns. If you want a risk-free investment option that guarantees fixed returns, bank fixed deposits (FDs) remain one of the most trusted choices.

Even when markets fluctuate or stocks fall, an FD continues to deliver the interest rate promised at the time of investment. That’s why salaried individuals, retirees and conservative investors prefer FDs. At present, several banks are offering up to 8 per cent interest on 5-year fixed deposits. Some small finance and private banks are attracting investors by offering higher returns.

Small Finance Banks offering up to 8% interest

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• Suryoday Small Finance Bank – around 8.00 per cent
• Jana Small Finance Bank – around 8.00 per cent
• Utkarsh Small Finance Bank – around 7.50 per cent
• Ujjivan Small Finance Bank – around 7.20 per cent
• RBL Bank – around 7.20 per cent
• Equitas, DCB, Capital Small Finance Bank, SBM around 7.00 per cent

These banks are currently offering some of the highest FD returns in the market.

Also Read: 444-Day Special FDs: SBI, BoB, IoB & more—Which PSU bank offers highest return on Rs 7.77 lakh investment?

Private Banks: Lower returns but better stability

• IDFC First Bank – around 7.00 per cent
• ICICI Bank, Tamilnad Mercantile Bank – around 6.60 per cent
• Axis Bank – around 6.45 per cent
• HDFC Bank – around 6.40 per cent
• Kotak Mahindra Bank – around 6.25 per cent
• IDBI Bank – around 6.35 per cent

Private banks are preferred for their strong service network and stability.

PSU bank FD rates

• Bank of Baroda – around 6.40 per cent
• PNB – around 6.25 per cent
• SBI – around 6.05 per cent
• Union Bank, UCO Bank – around 6.10 per cent

PSU banks are considered the safest, especially for senior citizens.

How much will Rs 1 lakh become?

If you invest Rs 1 lakh for five years at 8 per cent interest, the maturity amount will be approximately Rs 1,48,595, giving you a return of about Rs 48,595. Tax-saving FDs also offer deductions under Section 80C, providing an additional benefit.

FAQs

Q1. In 2026, which bank has the best interest rate on a five-year FD?

Interest rates at Suryoday and Jana Small Finance Banks can reach up to 8 per cent.

Q2. Is investing in FD safe?

Indeed, FDs—particularly in government banks—are regarded as low-risk investments.

Q3. Does a five-year FD have a tax benefit?

Yes, Section 80C deductions are available for tax-saving FDs.

Q4. At 8% growth, how much will Rs 1 lakh increase in five years?

It will increase to about Rs 1,48,595.

Q5. Government or private bank FD: which is preferable?

Private and small finance banks provide better returns, but government banks are safer.