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PSU banks Vs Post office; Which offers better returns?
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The government recently hiked the interest rates on small savings and post office time deposits. We compare the post office interest rates with public sector undertaking banks (PSU banks). Pertinently, both offer immense security as they are government owned.
How interest rate yields compare
Bank | Tenure | Interest rates |
SBI | 1 year -5 years | 9.25% |
PNB | 1 year 1year -5 years |
9.50% 9.25%-9.50% |
BOB | 1 year 1 year-5 years |
9.25% 9.00%-9.25% |
IDBI Bank | 1 year 1 year-5years |
9.25% 9.25%-9.50% |
Post Office Schemes | Tenure | Interest rates |
Time Deposits |
1 year | 7.70% |
Time Deposits |
1-5 years | 7.70%- 8.50% |
Service
In terms of service, PSU Banks can be considered far superior to services availed at Post Offices. Also, technology at Post Offices is yet not upgraded, leaving issues like online redemption.
Tax Exemption
In both the cases of Post office Time Deposits and Bank Deposits the interest income is taxed.
Conclusion
In all respects Bank deposits seems more favorable, on account of their superior returns and better service.
GoodReturns.in
Story first published: Wednesday, March 28, 2012, 14:52 [IST]