For those investors who are reluctant towards taking any risk with their money, investing in Fixed deposit accounts of banks and post offices is a viable investment option as they offer guaranteed returns. Along with that, depositors get another option of investing in the tax-saving FDs where the depositors are allowed to exempt their earned income under section 80 (C) of the Income Tax Act.
However, the tax-saving FDs come with a condition that the subscribers cannot access their money from these deposits before 5 years from the date of investment as the capital stays locked-in for a period of 5 years.
On the other hand, the regular fixed deposits which are offered by banks and post offices provide the premature withdrawal facility but don’t enable tax saving.
Below, you will find the comparison between the interest rates offered by State Bank of India and India Post:
Fixed Deposit interest rates of SBI
The largest lending bank of the country, SBI, revised its rate of interest on FDs in March. If the deposit is less than Rs. 1 crore, the interest rate ranges from 5.75% to 6.75% of FDs which are up to 10 years of tenure. For senior citizens, the rate of interests is marginally higher by 20-50 basis point.
SBI allows the subscribers to maintain their fixed deposit accounts with a minimum balance of Rs. 1000. There is no maximum cap on the amount which SBI lets you deposit in its fixed deposit account.
*(All figures in % per annum)
|Tenors||Existing for Public w.e.f. 28.02.2018||Revised For Public w.e.f. 28.03.2018||Existing for Senior Citizens w.e.f. 28.02.2018||Revised for Senior Citizens w.e.f. 28.03.2018|
|7 days to 45 days||5.75||5.75||6.25||6.25|
|46 days to 179 days||6.25||6.25||6.75||6.75|
|180 days to 210 days||6.35||6.35||6.85||6.85|
|211 days to less than 1 year||6.4||6.4||6.9||6.9|
|1 year to less than 2 years||6.4||6.4||6.9||6.9|
|2 years to less than 3 years||6.5||6.6||7||7.1|
|3 years to less than 5 years||6.5||6.7||7||7.2|
|5 years and up to 10 years||6.5||6.75||7||7.25|
Fixed deposit interest rates on post office fixed deposit accounts
For those customers who are looking to deposit their money in post office can deposit in fixed deposit accounts of India Post which are running under the Ministry of Communications. Both individuals as well as joint FD accounts can be easily opened with India post via cheque or cash as stated on its website indiapost.gov.in. Similar to SBI, there is no cap on the maximum amount that can be deposited. And the minimum balance which needs to be kept in the fixed deposit account at all times is Rs. 200 at least.
The following are the interest rates on January 1, 2018:
Depending on the purpose of making an investment, one should choose between a timely interest payout and aggregated option. For example, those investors who are looking forward to pocket a regular flow of money should go for the monthly or quarterly payout option, and those wishing to have a combined sum at the end of the specified term can opt of the latter option.