The tenure of term deposits in State Bank of India can range from 7 days to 10 years. The post office plans are for a period of 1, 2, 3 and 5 years only.
If you are in a dilemma whether to invest your money in post office FD or SBI term deposit, there are several factors that you need to consider.
Post Office Fixed Deposit (FD) is a safe option to invest your money. The schemes offer returns that are competitive with many bank FDs. After the Reserve Bank of India hiked the repo rate from May 2022, banks have also increased returns on fixed deposits, with many banks offering more than 7 per cent interest. state Bank of India Offers returns between 3 to 7.5 per cent on fixed deposits.
If you are confused whether to invest your money in any post office fd or SBI Term Deposit, there are a number of factors that you need to consider.
Duration:
The tenure of term deposits in State Bank of India can range from 7 days to 10 years. The post office plans are for a period of 1, 2, 3 and 5 years only.
Return:
For the general public, State Bank of India offers returns between 3 and 7 per cent on retail deposits of less than Rs 2 crore. Senior citizens get an additional interest rate of 0.5 per cent. Below Special Amrit Kalash Scheme The bank’s yield can go up to 7.6 per cent. The duration of Amrit Kalash Yojana is 400 days.
Post office fixed deposits offer interest between 6.8 and 7.5 per cent. Interest is compounded annually. There is no special rate for senior citizens.
tax benefits:
Both SBI and Post Office will provide tax benefits to the customers under the Income Tax Act.
Premature Withdrawal:
In terms of post office no FD can be withdrawn before six months from the date of deposit. If the deposit is closed after six months but before one year, the post office savings account interest rate will be applicable on FD.
SBI’s FD can also be withdrawn prematurely. Fine will be imposed.
Which option to choose between SBI and Post Office FD?
You need to keep your financial goals in mind before making a decision. Both State Bank of India and Post Office schemes offer stable returns as they are linked to the government.
If you want to opt for short duration term deposit, then SBI can be a better option. For long term FDs, you can take your decision keeping in mind the rate of return.
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