FD Calculation: If you are considering an investment, your primary goal is likely to secure returns without risk. Currently, banks are trying to attract customers to their banking systems through various schemes—whether by lowering loan interest rates or raising interest rates on Fixed Deposits (FDs). Currently, banks are also observing a similar trend with FDs.
Interest Rates Offered on FDs
Capitalising on the increased risk associated with the stock market and other investment options, banks are currently introducing various FD schemes. Banks are offering particularly attractive interest rates for senior citizens. Many small finance banks are offering interest rates of up to 8.50%.
Which Banks Offer Higher Interest Rates?
Banks such as Equitas Small Finance Bank, ESAF Small Finance Bank, Suryoday Small Finance Bank, Jana Small Finance Bank, Ujjivan Small Finance Bank, Utkarsh Small Finance Bank, and Shivalik Small Finance Bank are offering interest rates ranging from 8.25% to 8.50% to senior citizens.
Interest on a ₹5 Lakh FD for 5 Years
If you invest ₹5 lakh in a fixed deposit at an annual interest rate of 8.50% for a tenure of 5 years—with interest compounded quarterly—the maturity amount comes to approximately ₹7.61 lakh.
Income from Interest
Based on the calculation, an investment of ₹5 lakh will yield approximately ₹7.61 lakh after 5 years. The income generated solely from interest amounts to ₹2.61 lakh (this figure is pre-tax). Please note that the interest earned on the FD may be subject to tax according to your applicable tax slab. Interest rates offered by public sector banks Public sector banks are offering interest rates ranging from 7.05% to 7.45% to senior citizens, whereas private sector banks are offering rates between 7.10% and 8%.