Post office Vs. Bank FD: Which gives the best interest rates on deposits of 1-year, 3-5 year maturity

Post Office Vs Bank FD Interest Rates

After the Reserve Bank of India raised repo rates by 140 points during the previous three months to 5.4%, a number of banks raised their deposit rates. For traditional investors who genuinely believe in traditional fixed deposits and post office deposit saving instruments, this is a wonderful news. In the wake of the pandemic, the central bank cut interest rates to levels not seen in a decade, which particularly hurt these small savers. For these investors, the second half of the year 2022 was even worse since they experienced a double whammy of strong inflation and deceptively low deposit rates. Now, these investors are hoping for better times.

post office vs bank fd interest rates
Post Office Vs Bank FD Interest Rates

Post Office Fixed Deposit

Because post office deposits have historically provided superior rates than most fixed deposit programs, they are particularly popular among small investors. Every three months, the government adjusts the interest rate on small savings plans like post office deposits. Investors hoped that the government would increase these interest rates for the July–September 2022 quarter in a manner similar to the RBI’s hike in repo rates. For the time being, they remained the same.

Post Office FD Interest Rate

The Post Office paid 5.5% interest on term deposits with a 1-year length and 6.7% interest on deposits with a 5-year maturity for the quarter that ended on September 30, 2022. The POTD scheme requires a minimum investment of Rs 1,000, but there is no maximum investment amount. Under Section 80C of the Income Tax Act, deposits made in post office savings accounts with 5-year maturities are deductible from taxable income.

HDFC Bank FD Rates

Presently, HDFC Bank provides 6.1% on FDs with a term of 3 years, 1 day to 5 years and 5.5% on deposits with maturities of 1 year to 3 years.

ICICI Bank FD Rates

As of August 19, 2022, ICICI Bank offers FD deposits with maturities ranging from one to three years between 5.5% and 5.6%. Deposits between 3 years and 5 years get a 6.1% interest rate.

SBI Bank Interest Rates

The largest government bank in the nation offers rates on deposits with terms of one to three years between 5.45% and 5.50%. SBI offers 5.6% on FDs with maturities ranging from 3 years and a day to 5 years.

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