Post Office Term Deposit or Bank FD, which is paying the highest interest? Check Latest Interest Rate

Post Office Term Deposit: Common investors of the country invest extensively in both post office term deposits and bank FDs to get assured and safe returns on their money. To decide which of these options is better for you, it is important to know where the returns are being given at the moment.

What is the return in India Post Term Deposit

India Post Term Deposits (POTDs), colloquially also known as Post Office Fixed Deposits, have been extremely popular across the country for decades. The reach of the post office has also been in those areas of the country where banking facilities were less available. Being directly linked to the central government, the post office has also been considered the safest option for investment. Also, there is a good return on investment in the post office.

Special Features of Post Office Term Deposit

Term deposits in the post office can be made for 1 year, 2 years, 3 years or 5 years. A minimum of Rs 1000 can be deposited in this, after which any amount can be deposited in multiples of Rs 100. There is no maximum deposit limit. At present, 5.5 percent interest is being given in the post office on term deposits from 1 year to 3 years. While depositing for 5 years will get 6.70 percent interest.

The special thing is that the amount deposited in the post office term deposit can also be withdrawn after 6 months if needed. But in that case, only the interest paid on the Post Office Savings Accounts (POSA) will be available on the deposited amount, which is currently 4 percent per annum. Tax exemption is also available under section 80C of Income Tax on making a term deposit for 5 years.

Fixed deposits of banks 

You can also invest in fixed deposits of banks instead of post office. The rate of interest offered on FD of each bank is different. Usually, banks also levy a penalty for premature withdrawal of FD deposits, which usually ranges from 0.5 per cent to 1 per cent of the interest rate applicable on FDs. For your ease, here we are giving the current FD rates of some major banks. These rates are taken from the websites of these banks. For all banks, we have given here the interest rates applicable on deposits below Rs 2 crore.

SBI FD Rates

  • State Bank of India (SBI) is offering 5.60% interest on FDs ranging from 3 years to less than 5 years. In case of senior citizens, the interest rate is 6.10%.
  • State Bank of India (SBI) is giving 5.65% interest on FDs ranging from 5 years to 10 years. In case of senior citizens, the interest rate is 6.45%.

HDFC Bank FD Rates  

  • HDFC Bank is giving 6.10% interest on FDs ranging from 3 years 1 day to 5 years. In case of senior citizens, this interest rate is 6.60%.
  • HDFC Bank is giving 5.75% interest on FDs ranging from 5 years 1 day to 10 years. In case of senior citizens, this interest rate is 6.50%.

ICICI Bank FD Rates 

  • ICICI Bank is giving 6.10% interest on FDs ranging from 3 years 1 day to 5 years. In case of senior citizens, this interest rate is 6.60%.
  • ICICI Bank is giving 5.90% interest on FDs ranging from 5 years 1 day to 10 years. In case of senior citizens, this interest rate is 6.60%.

Axis Bank FD Rates

  • Axis Bank is offering 5.70% interest on FDs with tenures ranging from 3 years to less than 5 years. In case of senior citizens, the interest rate is 6.35%.
  • Axis Bank is giving 5.75% interest on FDs ranging from 5 years to 10 years. In case of senior citizens, the interest rate is 6.35%.

YES Bank FD Rates

  • Yes Bank is offering 6.75% interest on FDs ranging from 18 months to less than 3 years. In case of senior citizens, this interest rate is 7.25%.
  • Yes Bank is giving 6.75% interest on FDs ranging from 3 years to 10 years. In case of senior citizens, this interest rate is 7.50%.

It is clear from the above information that Axis Bank is currently paying the highest interest on FDs in these banks. But the investment decision in FD cannot be made on the basis of high returns only. Issues like the safety of investment to guarantee of returns are also very important. Post office term deposits and SBI FDs can be considered the safest as they are linked to the government. The safety of investments made in private sector banks depends on the financial strength of that bank. In such a situation, any investment decision should be taken keeping all the things in mind.

(The information given here is for the convenience of investors only. Rightsofemployees Online does not recommend investment in any instrument on its behalf. Please consult your investment advisor before taking any decision)