Post Office vs SBI Fixed Deposit rates: If you are a Fixed Deposit (FD) enthusiast, you may be wondering these days – where to invest? As banks respond to falling interest rates by reducing the interest rates on term, or fixed, or time deposit plans, the choice for depositors are getting narrower. The country’s largest lender, State Bank of India (SBI) once again announced to cut its Fixed Deposit rates for certain tenors on Monday.
The highest interest rate offered by the SBI is now just 6.50 percent on term deposits for 1 to less than 2 years. On deposits for 3 to less than 5 years and 5 to10 years, SBI is offering 6.25 percent interest.
If you are looking for a better and reliable place to open an FD account, and get better returns than SBI, the humble post office near you may provide the answer. Here is a comparison for your consideration:
Post Office Time Deposit Interest Rates
1-year: 7%
2-year: 7%
5-year: 7.7%
SBI Fixed Deposit Interest Rates
1-year: 6.50%
2-year: 6.25%
5-year: 6.25%
Suppose you plan to invest Rs 50,000, Rs 1,00,000, Rs 1,50,000 and Rs 2,00,000 in any of these term plans mentions. Here’s how your money will likely grow in SBI and Post Office*:
|
SBI |
Rs 50,000 |
Rs 1,00,000 |
Rs 1,50,000 |
Rs 2,00,000 |
|
1-year |
Rs 53330 |
Rs 106660 |
Rs 159990 |
Rs 213320 |
|
2-year |
Rs 56602 |
Rs113205 |
Rs 169808 |
Rs 226410 |
|
5-year |
Rs 68176 |
Rs 136353 |
Rs 204530 |
RS 272707 |
|
|
|
|
|
|
|
Post Office |
Rs 50,000 |
Rs 1,00,000 |
Rs 1,50,000 |
Rs 2,00,00 |
|
1-year |
Rs 53593 |
Rs 107186 |
RS 160779 |
RS 214372 |
|
2-year |
Rs 57186 |
Rs 114372 |
Rs 171558 |
Rs 228744 |
|
5-year |
Rs 69813 |
RS 139626 |
Rs 209439 |
Rs 279252 |
(*Calculations done with SBI FD maturity calculator, National Saving Interest Calculator of National Savings Institute)
You can see from the above chart that Post Office term plans will give better returns than SBI fixed deposits or 1, 2 and 5 years respectively.
Post Office also offers other investment instruments like National Savings Certificates, Kisan Vikas Patra, Senior Citizens Savings Scheme, Monthly Income Scheme, Public Provident Fund etc with interest rates over 7 percent. The interest rates of Post Office small savings schemes are revised quarterly by the government.