What are the advantages of a Fixed Deposit?

Compared to other investments, Fixed Deposits offer stable and fixed returns throughout their tenure. Furthermore, opening an FD account and investing is easier than trading in the stock market. Banks offer higher returns on FDs, making it more suitable for investors who want to avert market risk.

What happens in the case of the demise of an FD account holder?

In the case of the demise of an FD account holder, the selected nominee can claim the maturity amount. If the FD account holder did not add a nominee, an immediate family member can claim the amount. They need to produce a succession certificate to prove the relationship with the FD creator.

Should I open a savings account with the bank before investing in FD?

No, it is not compulsory to open a savings account with the bank to open an FD account. Most banks allow you to invest in FD without creating a savings account. With Stable Money, you just need to choose your preferred bank and book an FD to earn from ₹5 lakh FD interest for 1 year.

Are there any monthly or quarterly payout options in FDs?

Yes, many banks offer monthly or quarterly payout options for the interests. You need to choose your preferred payout option while booking an FD. On Stable Money, currently, Ujjiban SF Bank and Unity SF Bank are offering monthly or quarterly interest payout.

Do I need to complete a video KYC on every FD booking?

You need to complete a video KYC only once with a particular bank before opening an FD account. After that, for subsequent bookings with the same bank, you do not need any more video KYC.

5 Lakh FD Interest for 1 Year in 2026

Name: 5 Lakh FD Interest for 1 Year
Brand: Investments
Rating: 4.9 (12152 reviews)

Are you looking for a savings option with higher returns than traditional savings accounts? A Fixed Deposit (FD) could be the perfect solution, providing both security and better interest rates. To maximise your returns, you need to look around for FD rates from different banks and choose one with the highest return.

Let us break it down with a simple example for better understanding:

Suppose a retired individual (i.e. a senior citizen) wants to open an FD account with ₹5 lakh at South Indian Bank. The earnings from ₹5 lakh FD interest for 1 year will be ₹37,511.40 at a 7.3% interest rate, and the total payable amount will become ₹5,37,511.40 upon maturity.

However, with Stable Money, you can explore even better FD interest rates from various banks and NBFCs beyond South Indian Bank.

If you compare the FD interest rate with a non-partner FD provider, you will spot the difference. If a senior citizen invests in ICICI Bank’s FD, he/ she will gain interest at 7.2%. This means on a ₹5 lakh FD, the yearly interest becomes ₹36,984, and the maturity amount becomes ₹5,36,984 with ICICI Bank.

By comparing FD interest rates, you can make an informed decision and maximise your returns.

₹5 Lakh FD Interest for 1 Year by Top Banks or NBFCs in India

You can take reference from the table below and assess the interest rates by banks before investing and earning from an FD:

Fixed Deposit Provider	FD returns for Regular Customers	Interest Received Upon Maturity	Total Amount Received Upon Maturity	FD Returns for Senior Citizens	Interest Received Upon Maturity	Total Amount Received Upon Maturity
Shriram Finance Limited	7.59%	₹39,298.42	₹5,39,498.42	8.09%	₹41,984.07	₹5,41,984.07
Utkarsh Small Finance Bank	8.0%	₹41,216.08	₹5,41,216.08	8.6%	₹68,134.09	₹5,68,134.09
Bajaj Finance Limited	7.4%	₹37,000	₹5,37,000	7.65%	₹38,250	₹5,38,250
South Indian Bank	6.8%	₹34,876.87	₹5,34,876	7.3%	₹37,511.40	₹5,37,511.40
Axis Bank	6.70%	₹34,351	₹5,34,351	7.20%	₹36,984	₹5,36,984
HDFC Bank	6.60%	₹ 33,825	₹5,33,825	7.10%	₹ 36,456	₹ 5,36,456

Calculating monthly interest for a ₹5 lakh FD is now easy. Go to the official website of Stable Money and find the online FD calculator. Input your FD amount, interest rate and tenure to get instant information about your payable interest and maturity amount.

TDS on ₹5 Lakh Fixed Deposit for 1 year

When you invest in a Fixed Deposit with any FD provider, you need to pay a certain percentage as TDS on earnings from the interest. However, TDS becomes applicable only if the total earning exceeds a fixed upper limit. Here, take a look at how TDS on FD works:

If your earnings from a Fixed Deposit remain under the threshold of ₹40,000 annually, then you do not have to pay any TDS.
If your interest amount in a year is more than ₹40,000, then you are liable to pay 10% TDS on your FD interest.
In case you do not produce your PAN details, you need to pay a TDS of 20% on the FD interest.
Senior citizens also become liable to pay TDS amounts if the total income from FDs exceeds ₹50,000.

Penalty Applicable on Premature Withdrawal of a Fixed Deposit

If you want to have a stable income from ₹5 lakh FD interest for 1 year, you should not opt for premature FD withdrawal. Banks or NBFCs impose penalties for early FD withdrawal.

Based on their policies, FD providers impose a penalty ranging between 0.5% and 1% on the interest rate. However, some FD providers allow their customers to withdraw FDs prematurely without any penalty.

Important Things to Know Before Investing ₹5 Lakh in FD

Before investing and earning from a ₹5 lakh FD interest for 1 year, you must understand a few important things. Take a look at the important factors of an FD investment:

Offered Interest Rate

If you are investing in an FD, you must look for an FD provider with a higher interest yield. The interest will determine the ultimate maturity amount of your investment.

For example, Utkarsh SF Bank is offering a return of 8.6% for senior citizens for one year of FD investment. This is much higher than other providers offering FDs for senior citizens.

Know the Prematurity Norms

It is possible that you may need to break a fixed deposit (FD) before its maturity period due to financial emergencies. Therefore, it is important to understand the premature withdrawal clauses set by the bank or NBFC before investing in an FD.

Use the Stable Money app to check the withdrawal conditions for various banks and NBFCs.

Submit Declaration Form 15G or 15H

If your FD interest income is below the taxable threshold, you must declare it to avoid TDS (Tax Deducted at Source). If you are below 60 years old, submit Form 15G to your FD-issuing bank. In case you are a senior citizen (60+ years), submit Form 15H instead.

Get Loans Against Your FD

If you have a financial emergency, instead of breaking your FD prematurely, opt for a loan against your FD. An individual can avail 90% of their FD amount as a loan at a lower rate of interest. Usually, such an interest rate is 2% more than the FD interest rate.

Invest today with the Stable Money app and earn from ₹5 lakh FD interest for 1 year. Utkarsh SF Bank is offering up to an 8.6% interest rate on opening an FD account via Stable Money. Most importantly, you don’t need to open a savings account with the bank to invest in FDs.