SBI fixed deposits vs Post Office deposits: Check latest interest rates here  |  Photo Credit: PTI
New Delhi: Fixed Deposits (FDs) are considered one of the safest and most popular means of investment for many. SBI’s fixed deposit rates have fallen by anywhere between 85 basis points to 160 basis points since the beginning of 2020. This has prompted a lot of people to switch to other options such as Post office term deposit schemes, which work in a similar fashion to a fixed deposit.
State Bank of India fixed deposits (FDs)
State Bank of India marginally revised interest rates on fixed deposits earlier this month. With effect from September 10, SBI pays an annual return of 5.40 per cent to senior citizens and 4.90 per cent to other customers retail deposits – or fixed deposits up to Rs 2 crore – of a maturity period of one year to less than two years, according to the lender’s website – sbi.co.in. That marks a 20-basis-point lower in the interest rates, compared to the existing 5.60 per cent and 5.10 per cent respectively.
Commercial banks such as SBI – the country’s largest lender by assets – revise the interest rates applicable to various financial instruments, such as term deposits – also known as fixed deposits, which are deposits locked in for a “fixed” period of time at a pre-defined rate.
SBI latest FD rates
|Maturity period||Interest rates|
|General Public||Senior citizen|
|Seven days to 45 days||2.90%||3.40%|
|46 days to 179 days||3.90%||4.40%|
|180 days to 210 days||4.40%||4.90%|
|211 days to less than one year||4.40%||4.90%|
|One year to less than two years||5.10%||5.60%|
|Two years to less than three years||5.10%||5.60%|
|Three years to less than five years||5.30%||5.80%|
|Five years and up to 10 years||5.40%||6.20%|
Post office term deposits
Post office term deposit schemes are similar to bank FDs. Post offices offer term deposits ranging from one year to five years. The interest on Post Office deposits was revised on 1 April 2020. For a one-year time deposit to three years, it offers an interest rate of 5.5%. For a five-year time deposit account, the Post Office offers an interest rate of 6.7%.
These are backed by the Government of India and hence there should be no problem in getting your maturity and principal amount, even for a slightly longer duration. The 5-year deposits quality for tax exemption under Sec 80C of the Income Tax, though the interest earned is fully taxable under the hands of investors.