SBI fixed deposit vs Post Office term deposit schemes: Where should you invest?

SBI fixed deposit vs Post Office term deposit schemes: From 1st April 2022, the new interest rates for post office term deposits have come into effect. (Mint)


SBI fixed deposit vs Post Office term deposit schemes: Fixed deposits have been the safest investment option for senior citizens as well as the middle class in India. These term deposits provide you with the option of investing in short-term as well as long-term. Depending upon the need, you can choose either. Apart from banks, FD schemes are also provided by Post Offices. While comparing the rate of interest offered by the State Bank of India fixed deposits for a tenure of five years and post office term deposits for the same tenure, the difference comes to around 1.2%. On one hand, where SBI fixed deposit rates are 5.5%, on the other hand, post office term deposits offer an interest rate of 6.7% when the investment is made for five years. From 1st April 2022, the new interest rates for post office term deposits have come into effect. 

The Government of India (GoI) has kept the interest rate on small saving schemes unchanged for Q1FY23. , “The rate of interest on various small savings schemes for the first quarter of the financial year 2022-23, starting from April 1, 2022, and ending on June 30, 2022, shall remain unchanged from the current rates applicable for the fourth quarter (January 1, 2022, to March 31, 2022) for FY 2021-22,” the Ministry of Finance announced through a notification dated 31st March 2022.

SBI latest FD interest rates

SBI FDs between 7 days to 10 years will give 2.9% to 5.5% to general customers. Senior citizens will get 50 basis points (bps) extra on these deposits -3.4 %to 6.30%. These rates are effective from 15 February 2022.

7 days to 45 days – 2.9%

46 days to 179 days – 3.9%

180 days to 210 days – 4.4%

211 days to less than 1 year – 4.4%

1 year to less than 2 years – 5.1%

2 years to less than 3 years – 5.2%

3 years to less than 5 years – 5.45%

5 years and up to 10 years – 5.5%

Post Office term deposit interest rates with effect from 1 April 2022

Post office term deposit schemes are similar to bank FDs. Post offices offer term deposits ranging from one year to five years. Like bank FDs, investors earn a guaranteed return through the tenure of the post office term deposit. The interest on Post Office deposits was revised on 1 April 2020. For a one-year time deposit to three years, it offers an interest rate of 5.5%. For a five-year time deposit account, Post Office offers an interest rate of 6.7%.

1yr-5.5%

2yr-5.5%

3yr-5.5%

5yr-6.7​ %

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