Post Office FD vs Bank FDs: A Comparison For Your Personal Finance Space

SBI FD Rates

SBI FD tenures range from 7 days to 10 years. For the general public SBI FD interest rates range from 2.9 percent and 5.4 percent w.e.f. January 8 2021.

IDFC First Bank FD Rates

The new FD interest rates of IDFC First Bank are valid as of September 15, 2020. IDFC First Bank provides short-term FDs of between seven days and one year and long-term FDs of between one and ten years. IDFC First Bank has a spread of 2.75% p.a. 5.75 percent p.a. For deposits with a period of between 7 days and 10 years. For the same tenure senior citizens will be provided an additional rate of 0.50 percent over and above the standard rates.

HDFC FD Rates

The current HDFC FD Rates are in effect from 13 Nov 2020. For the general public the deposit rates are capped between 2.5% to 5.5% for a tenure of 7 days to 10 years.

ICICI Bank FD Rates

ICICI Bank FD Rates for the general public and senior citizens are capped at 2.5% to 5.5% and 3% to 6.30%. The current rates with effect from Oct 21, 2020 are as follows:

5 Best Corporate FDs

Company fixed deposits, also at a slightly higher risk, are popular, but this may be a concern for investors who wish to achieve higher returns than bank fixed deposits. However, just like FDs, interest on corporate FDs is fully taxable according to the tax slab rate of the investor. Typically, we still say that it is possible to accept AA or AAA-rated FDs, which means that the standard of security in terms of maturity is strong.

Small Finance Bank FDs

Fixed deposits are a major stream of investments to get guaranteed returns. In general, interest rates on FDs vary depending on the capital deposited, maturity of the deposit, type of depositor and etc. As compared to commercial banks, small finance banks usually offer higher interest rates on fixed deposits. At present, some banks have interest rates on FDs ranging from 2.5 to 7.5 percent.

Jana Small Finance Bank FD

Jana Small Finance Bank supports an interest rate of between 2.5 percent and 7.50 percent on FDs ranging from 7 days to 10 years. An additional interest of 0.50 per cent is provided by the bank to senior citizens. This bank is now offering senior citizens an interest rate of 4 percent to 8 percent, respectively. The best interest rate on deposits maturing in two to three years is provided by Jana Small Finance Bank. The bank gives the general public and senior citizens an interest rate of 7.25 percent and 7.75 percent, respectively, for these deposits. The bank’s FD interest rates given below are valid as of Dec 22, 2020 and are valid for a deposit sum of Rs 2 Cr.

Utkarsh Small Finance Bank FD Rates

Utkarsh Small Finance Bank provides interest rates ranging from 3 percent to 7 percent to the general public and 3.50 percent to 7.50 percent to senior citizens on FDs maturing in 7 days to 10 years. The bank pays the best interest rate on deposits with a maturity period of 700 days. The bank pays a 7.0 per cent interest rate on these deposits. Senior citizens get an additional 50 basis points for these deposits. The interest rates listed below on Utkarsh Small Finance Bank’s FDs are effective from Oct-19.

Suryoday Small Finance Bank FD Rates

Suryoday Bank FD rate ranges from 4 per cent to 7.50 per cent for the general public. The bank pays the highest interest rate, i.e. 7.5 percent, on deposits maturing in 5 years. Suryoday Bank’s existing FD interest rates are valid as of September-19.

Post Office Time Deposit

Just like a standard fixed deposit scheme of a bank post office time deposits come with a tenure of 5 years. Across the tenure of the post office term deposit depositors earn guaranteed returns. For a one-year deposit to three years, the post office term deposit pays an interest rate of 5.5 percent. For a five-year time deposit account, the Post Office pays an interest rate of 6.7 per cent.

Our take

Fixed Deposits (FDs) are part of your personal finance space, and thus it is very important to consider guaranteed returns and deposit tenure first instead of higher interest rates. So it’s a smart strategy to invest in the post office time deposit scheme instead of the bank fixed deposit when it comes to deciding between bank deposits and post office deposit because the post office small savings schemes are 100% backed by the government. Whereas insurance cover for bank deposits is offered by DICGC, a subsidiary of the Reserve Bank of India. For both the principal and interest amount, each depositor in a bank is insured to a limit of Rs 5 lakh. From the above contrast, it is obvious that with Post Office FDs, you will have a high degree of safety if you wish to invest an amount of Rs 5 lakhs or above.