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Post Office FD vs Bank FDs: A Comparison For Your Personal Finance Space
Leading banks of India namely State Bank of India (SBI), HDFC Bank, ICICI Bank, IDFC First Bank and small finance banks such as Jana Small Finance Bank, Utkarsh Small Finance Bank and Suryoday Small Finance Bank are currently providing higher interest rates on fixed deposits. Bank like fixed deposits called Post Office Time Deposit is also an alternative for long term investors who want to reap guaranteed returns against their deposits. The interest rates on these deposits are kept unchanged for the quarter of March 31, 2021. But when it comes to fixed deposit investment for both the general public and senior citizens which can be a good bet here. Let's find out.
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.
| Tenure | ROI for the general public | ROI for senior citizens |
|---|---|---|
| 7 days to 45 days | 2.9 | 3.4 |
| 46 days to 179 days | 3.9 | 4.4 |
| 180 days to 210 days | 4.4 | 4.9 |
| 211 days to less than 1 year | 4.4 | 4.9 |
| 1 year to less than 2 year | 5 | 5.5 |
| 2 years to less than 3 years | 5.1 | 5.6 |
| 3 years to less than 5 years | 5.3 | 5.8 |
| 5 years and up to 10 years | 5.4 | 6.2 |
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 with an additional rate of 0.50 percent over and above the standard rates.
| Tenure | ROI in % |
|---|---|
| 7 - 14 days | 2.75% |
| 15 - 29 days | 3.00% |
| 30 - 45 days | 3.50% |
| 46 - 90 days | 4.00% |
| 91 - 180 days | 4.50% |
| 181 days - less than 1 year | 5.25% |
| 1 year - 499 days | 5.75% |
| 500 days | 6.00% |
| 501 days - 2 years | 5.75% |
| 2 years 1 day - 5 years | 5.75% |
| 5 years 1 day - 10 years | 5.75% |
| 5 Years Tax Saver Deposit | 5.75% |
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.
| Tenure | ROI in % for the general public | ROI in % for the senior citizens |
|---|---|---|
| 7 - 14 days | 2.50% | 3.00% |
| 15 - 29 days | 2.50% | 3.00% |
| 30 - 45 days | 3.00% | 3.50% |
| 46 - 60 days | 3.00% | 3.50% |
| 61 - 90 days | 3.00% | 3.50% |
| 91 days - 6 months | 3.50% | 4.00% |
| 6 months 1 day - 9 months | 4.40% | 4.90% |
| 9 months 1 day < 1 Year | 4.40% | 4.90% |
| 1 Year | 4.90% | 5.40% |
| 1 year 1 day - 2 years | 4.90% | 5.40% |
| 2 years 1 day - 3 years | 5.15% | 5.65% |
| 3 year 1 day- 5 years | 5.30% | 5.80% |
| 5 years 1 day - 10 years | 5.50% | 6.25% |
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:
| Tenure | ROI in % for the general public | ROI in % for senior citizens |
|---|---|---|
| 7 days to 14 days | 2.50% | 3.00% |
| 15 days to 29 days | 2.50% | 3.00% |
| 30 days to 45 days | 3.00% | 3.50% |
| 46 days to 60 days | 3.00% | 3.50% |
| 61 days to 90 days | 3.00% | 3.50% |
| 91 days to 120 days | 3.50% | 4.00% |
| 121 days to 184 days | 3.50% | 4.00% |
| 185 days to 210 days | 4.40% | 4.90% |
| 211 days to 270 days | 4.40% | 4.90% |
| 271 days to 289 days | 4.40% | 4.90% |
| 290 days to less than 1 year | 4.40% | 4.90% |
| 1 year to 389 days | 4.90% | 5.40% |
| 390 days to < 18 months | 4.90% | 5.40% |
| 18 months days to 2 years | 5.00% | 5.50% |
| 2 years 1 day to 3 years | 5.15% | 5.65% |
| 3 years 1 day to 5 years | 5.35% | 5.85% |
| 5 years 1 day to 10 years | 5.50% | 6.30% |
| 5 Years Tax Saver FD | 5.35% | 5.85% |
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.
| Corporates | ROI in % |
|---|---|
| Hawkins Cooker FD | 9% |
| Shriram City Union Finance | 8.09% |
| Shriram Transport Finance | 8.09% |
| HUDCO | 7.30% |
| PNB Housing Finance | 6.70% |
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.
| Tenure | ROI for the general public | ROI for senior citizens |
|---|---|---|
| 7-14 days | 2.50% | 3.00% |
| 15-60 days | 3.00% | 3.50% |
| 61-90 days | 3.75% | 4.25% |
| 91-180 days | 4.50% | 5.00% |
| 181-364 days | 6.00% | 6.50% |
| 1 Year[365 Days] | 6.75% | 7.25% |
| > 1 Year - 2 Years | 7.00% | 7.50% |
| >2 Years-3 Years | 7.00% | 7.50% |
| > 3 Year- < 5 Years | 7.25% | 7.75% |
| 5 Years[1825 Days] | 7.00% | 7.50% |
| > 5 Years - 10 Years | 6.50% | 7.00% |
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.
| Tenure | ROI for the general public | ROI for senior citizens |
|---|---|---|
| 7 Days to 45 Days | 3.00% | 3.50% |
| 46 Days to 90 Days | 3.25% | 3.75% |
| 91 Days to 180 Days | 4.00% | 4.50% |
| 181 Days to 364 Days | 6.00% | 6.50% |
| 365 Days to 699 Days | 6.75% | 7.25% |
| 700 Days | 7.00% | 7.50% |
| 701 Days to 3652 Days | 6.75% | 7.25% |
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.
| Tenure | ROI for the general public | ROI for senior citizens |
|---|---|---|
| 7 days to 14 days | 4.00% | 4.50% |
| 15 days to 45 days | 4.00% | 4.50% |
| 46 days to 90 days | 5.00% | 5.50% |
| 91 days to 6 months | 5.50% | 6.00% |
| Above 6 months to 9 months | 6.00% | 6.50% |
| Above 9 months to less than 1 Year | 6.25% | 6.75% |
| 1 Year to 2 years | 6.75% | 7.25% |
| Above 2 Years to 3 Years | 7.00% | 7.50% |
| Above 3 Years to less than 5 Years | 7.10% | 7.60% |
| 5 Years | 7.25% | 7.75% |
| Above 5 years to 10 years | 6.50% | 7.00% |
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 per cent. For a five-year time deposit account, the Post Office pays an interest rate of 6.7 per cent.
| Tenure | ROI |
|---|---|
| 1 year | 5.50% |
| 2 year | 5.50% |
| 3 year | 5.50% |
| 5 year | 6.70% |
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.
