SBI Vs. Post Office RD/FD: Check Latest Rates Here

On Friday, September 29, the Finance Ministry left small savings interest rates at the same level for the October-December quarter, or Q3FY24, with the exception of a modest increase in five-year recurring deposit rates for the fifth consecutive quarter. The rate of interest on the five-year recurring deposit has risen to 6.7 per cent from 6.5 per cent, according to a notification issued by the finance ministry on September 29. The government hiked interest rates in the last quarter, Q2FY24, or the July-September 2023 quarter, by 10 to 30 bps. Investors should be mindful of how the post office's higher RD rates compare to those of SBI, India's largest bank. Here's the latest comparison.

SBI RD Rates

Customers may open a recurring deposit (RD) account at any bank branch with a minimum deposit of Rs. 100 per month, with further deposits in multiples of Rs. 10 per month, and SBI allows RDs for a duration of 12 months to 120 months. For the general public and senior citizens, SBI RD rates are the same as those for term deposits. With effect from 15/02/2023 SBI RD rates are in force.

7 days to 45 days: 3.00
46 days to 179 days: 4.50
180 days to 210 days: 5.25
211 days to less than 1 year: 5.75
1 Year to less than 2 years: 6.80
2 years to less than 3 years: 7.00
3 years to less than 5 years: 6.50
5 years and up to 10 years: 6.50
400 days (Special Scheme i.e. "Amrit Kalash"): 7.10

Post Office RD

The 5-Year Post Office Recurring Deposit Account (RD) can be opened with a minimum deposit of INR 100 per month or any amount in multiples of INR 10 with no maximum. In comparison to SBI, the post office RD provides a current interest rate of 6.7% on a 5-year term, while SBI gives a return of 6.50% on RD for the same period. This indicates that the post office RD offers you 20 basis points higher interest rates than SBI RD.

A post office RD account can be extended for an additional 5 years once it matures after 5 years by submitting an application at the appropriate post office. The interest rate when the account was initially created will be the interest rate that applies during the extension. After three years from the date of account opening, RD Accounts may be prematurely ended by completing the required application form to the relevant Post Office. If the account is prematurely closed even one day before maturity, the interest rate for PO Savings Accounts will apply.

Post Office FD

The Post Office Time Deposit Account (TD) account is a type of term deposit plan that provides interest rates that are higher than those offered by some of the top banks, notably SBI, HDFC, ICICI, Axis Bank, and others. Post Office FD offers a 6.9% return on 1-year tenure, 7.0% on 2 to 3 years and 7.5% on account maturing in 5 years. These interests are calculated quarterly but are paid yearly. A minimum deposit of INR 1000 can be made in order to open an account, and deposits can be made in multiples of 100 with no maximum amount. Income tax deductions under Section 80C of the Income Tax Act of 1961 is applicable to the investment made under the five-year TD plan.