Is a 5-year FD a good investment?

A 5-year fixed deposit (FD) can be one of the best options for those seeking steady returns, with interest rates generally starting from 7% p.a. Senior citizens and women investors may receive an additional interest rate. It suits investors prioritising stability over high risk. Here’s why it’s worth considering:

• Stable Returns: Rates usually start from 7% p.a., offering predictable income or growth over 5 years.
• Low Risk: FDs are reliable, with your money protected regardless of market changes.
• Flexible Payouts: You can choose monthly, quarterly, half-yearly or annual payouts for regular cash. You can also opt for cumulative growth at maturity.
• Loan Option: You can typically borrow up to 75% of the FD amount for emergencies, after the lock-in period, without closing it.
• Compounding Benefits: Interest compounded quarterly or annually boosts returns over 5 years.
• Accessible Entry: Investors can start with as little as ₹5,000, making it suitable for various budgets.
  Consider your goals, as FDs lock funds for 5 years, and early withdrawal may incur penalties. Compare rates and check financial institution ratings for the best fit.